fastboot mobile: white paper: print design

FastGuard Remote Device Locking Platform.

According to the Pew Research Center, smartphone ownership in the United States almost doubled in the past four years, with an estimated 65 percent of Americans owning smartphones in 2015. However, as mobile device prices rise, carriers abandon two-year subsidy plans, and users increasingly wish for the next new model, more and more users are exploring alternatives to buying their handsets.

An ever-increasing number of mobile device users:

fastbootmobile.com [email protected]

The Changing Landscape of Mobile Device Possession

FINANCE their phone through

equipment installment plans (EIPs).

RENT-TO-OWN(RTO) their phone.

Use a phone provided by their

EMPLOYER

21%

This new world of device financing comes with a large number of opportunities and challenges for distributors, operators, and retailers.

Above all, it raises one question:

How can handset device financiers better control and recover the phone when someone else has physical possession of the handset?

Source: SNL, Macquarie Research, October 2015. Big 4 defined as VZ, T, S, TMUS.

25%

30%

0%

5%

10%

15%

20%

2Q151Q154Q143Q142Q141Q144Q13

increasing as a % of postpaid base.

Big 4 EIP Subs

4%

8%

12%

18%

25%

29%

FastGuard Remote Device Locking Platform


Penetration of device financing plans continue to rise, as AT&T + Sprint + Verizon do away with

two year subsidy plans.

Installment + Leasing Plans

78%

83%

63%

3Q15E2Q153Q143Q15E2Q153Q143Q15E2Q153Q143Q15E2Q153Q14

5%15% 19%

12%

31%

40%

84%93% 94%

Source: Company Data, Morgan Stanley Research.

Take Rate (% of New Smartphones Sold on Installment Plans)

3Q15E2Q153Q14 3Q15E2Q153Q14 3Q15E2Q153Q14

50%

68%

AT&T

VERIZON

SPRINT 27%

65%64%

5%

60%

49%

(EIP % of postpaid subscribers)

AT&T

T-MOBILE

VERIZON

SPRINT

75%

The Problem Illustrated for Carriers: Sprint Case Study

As of Q2 2015, Sprint allows for $217 million of credit losses on $1.45 billion of gross receivables from device installment plans. This is 15 percent – a huge cost.

In the same quarter, the company recognized $81 million of bad debt expense and $400 million for the trailing twelve-month period.

Subprime customers represent 23.3% of installment plan receivables but 41% of past due receivables.

01

02

03

15%LOSS

$400MILLIONDEBT

PAST DUE

41%

03

02

01


“Leasing programs subject carriers “to increased risks relating to consumer credit issues,

which could result in increased costs, including increases to our bad debt expense and

write-offs of installment billing receivables. These arrangements may be particularly sensitive

to changes in general economic conditions, and any declines in the credit quality of our

subscriber base could have a material adverse effect on our financial position and results

of operations." " – Source: Sprint 2014 Annual Report

Carriers need a credible solution for dealing with delinquencies while allowing them to grow their base of customers, both prime and subprime.


Carriers have opportunity for revenue growth, but customer credit issues are a clear concern that could have disastrous effects in the event of an economic downturn.

The Challenge: Receiving Payments & Recovering Devices

New phone financing plans are very similar to traditional automobile financing plans. However, financing a phone comes with a unique set of problems compared to leasing a car or truck, from how late payments can be collected to how stolen property can be recovered.

While financing phones can significantly grow a subscriber base and increase revenue, the current risks associated with EIPs and RTO programs either prevent businesses from exploring financing programs or prevent businesses from suffering losses through:

Late Payments

Unreturned Devices

Theft while in end-user possession

Costly Collection and Recovery Strategies

Subsidy protection in retail distribution points

Current solutions to these problems are simply not recovering the maximum amount of revenue lost due to issues with efficiency and effectiveness.


FastGuard remote locking software disables most handset functionality in cases of late payment, theft, or unreturned handsets.

Cost-Effective: recover devices

and late payments, avoiding expensive collection efforts.

Plug-and-Play: no complex

integration with existing infrastructure.

Private: personal consumer

data not required.

Secure: encrypted authentication

ensures data and device are protected.

Lock in Bulk: protect devices

during shipping and distribution.

Custom: fit your brand

and your business needs.

Our BenefitsRecovers payments and devices, grows revenue,

avoids collections processes, and promotes privacy.


The Challenge: Receiving Payments & Recovering Devices

New phone financing plans are very similar to traditional automobile financing plans. However, financing a phone comes with a unique set of problems compared to leasing a car or truck, from how late payments can be collected to how stolen property can be recovered.

While financing phones can significantly grow a subscriber base and increase revenue, the current risks associated with EIPs and RTO programs either prevent businesses from exploring financing programs or prevent businesses from suffering losses through:

Late Payments

Unreturned Devices

Theft while in end-user possession

Costly Collection and Recovery Strategies

Subsidy protection in retail distribution points

SECURE: FastGuard will protect a device even after factory reset. A data wipe will not unblock a device, and it will automatically re-block after connecting to the internet.

When blocked, FastGuard prevents technically savvy users (or those with advice from such users)from bypassing the lock screen. Secure APIs within Android are used to block the running of other software on the device, and it is not possible for users to adjust device settings or access the ADB debugging interface over USB.

FULLY CUSTOM: FastGuard can be customized even after deployment, allowing for re-branding and adjustment of the user interface seen when a device is blocked.

SIMPLE: Limited access to WiFi settings is available from the lock screen, to allow users to connect a blocked device to WiFi to unlock it.

Devices may be unlocked via an over-the-air message, an SMS sent to the device, a manually entered one-time unlock password, or a scannable one-time password, in the form of a QR code. This allows for rapid activation of devices without internet connectivity being available.

Lighter weight. Simplified.

Fully customizable. Secure.

Available for current Android models.

How does FastGuard stack up to other solutions?



FastGuard Process Overview

Device is customized by Fastboot Mobile to include FastGuardand verify operation and functionality of solution on the hardware

0503

0104

02Devices can be shipped in a 'locked' state, requiring activation/unlocking at point-of-sale, or shipped in an unlocked state while listening for future locking commands.

Retailer or distributor registers device when it is sold.

Customer enters into a Equipment Installment Plan and takes possession of the handset.

Devices with delinquent payments or those that are reported lost or stolen may be blocked individually from the web portal or from abatch submission.


Security

FastGuard utilizes both strongly pinned TLS, the same technology used to protect banking and financial transactions online, and an extra layer of digital signature protection on messages sent from the server to user devices. User devices will reject messages that are not signed with a SKU-specific key and will send a random challenge with every status request to ensure thatserver messages are not replayed or otherwise falsified.

For clients with even higher security requirements, FastGuard can integrate a split solution in which the client holds the private keys necessary to generate activation and lock messages, relaying the signed messages to FastGuard's servers. This provides a high-assurance solution for clients who do not wish Fastboot Mobile to have access to the keys used to communicate with devices, and allows for the keys to be held within the client's regular infrastructure.

User Privacy

FastGuard does not store, gather, or facilitate the entry of personally identifiable information. To prevent disclosure of the IMEI, the software makes use of a one-way hashed version of the IMEI only for a limited time to handle device requests.

FastGuard permits clients to (optionally) enter a user ID for each device (such as a customernumber) as a failsafe to prevent accidentally blocking the wrong device, although this is optional and may be disabled.


Customization

All messages and graphics seen by the user are customizable. It is also possible to define custom lock messages (lost, stolen, overdue payment, etc.) and custom calls-to-action to encourage reconciliation by the user.

Colors used in all interface components can match client branding.

Clients may optionally specify (and test) custom strategies for revenue recovery, includingtimed reminders of payments due, and even the ability to make payment directly from a customized application using a credit or debit card.

Administration & Reporting

FastGuard is optimized for use in large business environments in which devices may be activated under a variety of organizational units (such as stores). Managers may delegate admin access within their units, and administrative users from headquarters or call centers may execute operations across all units

Full audit logs of events are generated and can be transmitted to the clientin encrypted form.

Working with Fastboot MobileWhen comparing products and services, it is vital to compare not just features and benefits, but also who you will be working with. At Fastboot Mobile, we are not only committed to developing innovative software, but also to creating relationships that create the next big idea and that move the industry forward.

FastGuard Remote Device Locking Platform.


fastboot mobile: white paper: print design

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