Smart Communications: Low-cost Money Transfers for Overseas Filipino Workers

Smart Communications, Inc. (Smart) is a leading wireless telephone services provider in the Philippines and a subsidiary of the largest and most diversified telecommunications company, the Philippine Long Distance and Telephone Company (PLDT). Smart has been widely cited for its innovations in product development targeting the “base of the pyramid” (BOP) market. This case looks at the latest innovations of the company’s business model, particularly the products and services that directly respond to the needs of the Overseas Filipino Workers (OFW). OFW have been instrumental in helping to buoy the Philippine economy through remittances, totaling US$10.7 billion through formal channels in 2005, an amount estimated to be at least matched by money sent through informal channels. Smart pioneered a cheaper, faster (in real time) and more convenient way of sending remittances using the short messaging system (SMS) technology. This, and other product innovations described in this case, allowed Smart to serve OFW, including the poor segments of the OFW community and their families. For OFW, low-cost communication and remittance services enable them to maximize the impact of their hard-earned income.

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