DEXTER -- With the number of cell phones in use worldwide hitting 2 billion and rising, recycled phones are playing a crucial role in the spread of wireless communications across the developing world, where land lines can be costly or unavailable.
The odds are good that a refurbished cell phone in the pocket of a user in Bolivia, Jamaica, Kenya, Ukraine or Yemen originated with ReCellular Inc. Based in small-town Michigan, ReCellular gets 75,000 used phones a week -- most collected in charity fundraisers -- and refurbishes them for sale around the world.
ReCellular has more than half the U.S. phone recycling business. Executives say they are doing well for themselves as well as for the March of Dimes and other national charities that benefit from the company's purchase of donated phones.
"The fact that you can combine a business -- a profitable business -- with a useful service and a charitable good is a win, win, win," said ReCellular Vice President Mike Newman, 32.
Charles Newman, Mike's father, founded the company in 1991 after decades as an entrepreneur in the retail computer business.
That year, there were about 16 million cellular subscribers worldwide, according to the International Telecommunication Union. By 2005, that number had grown to 2.14 billion, outstripping the
1.26 billion land lines, the group said.
When ReCellular opened for business 15 years ago, it handled 300 to 400 cell phones a month.
"If we're not doing that many in a few minutes (now), we're having a bad day," Mike Newman said.
With Americans trading in their phones for fancier models every 18 months on average, the supply of used but perfectly functional phones is enormous, Newman said. Millions, however, end up sitting in drawers or closets because people don't know what to do with them, he said.
"Most people would be glad to donate them if they knew they could," he said.
ReCellular outgrew its home in Ann Arbor in 2003 and moved to an industrial park in nearby Dexter. The village of 1,700 is 40 miles west of Detroit.
The company has a work force of 250, 200 of them local, and again finds itself bursting at the seams. Revenues of the privately held company, about $40 million last year, are shooting up as well, he said.
"We're on track to jump 67 percent this year," said Newman, who found himself drawn to the family business after working as a Washington lobbyist for the Sierra Club and then for Al Gore's 2000 presidential campaign.
Work crews separate the phones from the "spaghetti" of non- reusable wires and cords that are set aside for recycling. The phones are sorted, tested, fixed and packaged by model for resale.
ReCellular handles about 500 phone models. About 60 percent of the phones that come in are reusable. The rest are used for parts or sold as scrap.
"We squeeze out as much value as possible," Newman said.
The refurbished phones sell wholesale for about $17 to $18. Retailers sell them for $40 or less, he said.
ReCellular has about 53 percent of the used cell phone business in the U.S. Other major players include RMS Communications Inc., in Ocala, Fla., and PaceButler Corp., in Edmond, Okla.
Newman said 55 percent to 60 percent of its phones are sold outside the
U.S., and said the company has about a quarter of the worldwide cell phone refurbishing business.
Refurbished cell phones are opening doors to wireless communication in much of the developing world, where a new cell phone might be prohibitively expensive, said Michael Blumberg, president of D.F. Blumberg Associates Inc., in Willow Grove, Pa.
"Sometimes, you have someone in a village who has a cell phone and rents out time," he said.
Today, about 80 percent of the world's people live in an area with cell phone reception. Along with education and health care, the spread of cell phones is a leading spur to economic growth, he said.
The March of Dimes, which does research and education on birth defect prevention, turned to ReCellular when it decided to start a cell phone donation program several years ago. The drive brings in about $160,000 a year.
"They are an excellent company to deal with," said March of Dimes fundraising executive Bob Perry.
Source: The Grand Rapids Press