BILLION $ BUSINESS

BILLION $ BUSINESS

Carlos Pestana, sales manager at HSC

Carlos Pestana, sales manager at HSC

HSC, the airtime distribution division of Carphone Warehouse, is one of the industry’s most experienced multi network airtime distributors. Since its inception in 1994, HSC has grown to offer a wide range of network airtime, mobile devices and software solutions in order to enable independent resellers to offer customers the best mobile solutions. Here, Carlos Pestana, sales manager at HSC, talks about what makes this company tick.

HSC is part of a multi-billion dollar business, which gives the company unquestionable financial stability. Pestana states: “Dealers that have bought from HSC for over 15 years show a fantastic amount of loyalty. This is built on consistency and good quality service. A big factor in trading with customers over long periods like that is down to the low turnover of employees. This means the sales and finance account managers really understand the dealers’ businesses.”

The values of HSC business are consistent with most of the current management team, which has worked at HSC since day one. And the HSC offices are by the beach, giving employees another reason to stay, quips Pestana. “We work hard at being the best place to work and building the right environment to keep our team happy and customers looked after. This gets pushed through the business and creates a unified team focussed on delivering a certain standard of service. That’s why in a shrinking market, we are still growing our customer base month on month.”

Hedge your bets

HSC gives the dealer options, claims Pestana. He says it is dangerous to work

with one network only. “As big businesses, the networks motives and strategies can change,” he warns. “This can put the dealers in a vulnerable position; just look at 3’s recent rationalisation of call centres.

“From a B2B perspective, I think the channel has even more importance than before. New SME products and services are making it essential the local dealer is involved. They have to have deeper conversations with the customer as their requirements become more personalised built around mobile, fixed and IT,” Pestana comments.

“The networks don’t have the resource, flexibility or local relationships to deliver these needs; they know that. We’re seeing a shift in retail too. The independent retailer is not locking horns on price with the networks on consumer products. They are now looking closer at Blackberry and email solutions for their prosumer and small local businesses customers, knowing these products drive high ARPU, earning them strong ongoing revenues.

“I think the independent dealers that have survived in mobile are under appreciated. We are keen to increase their profile as one of the most cost effective and proactive routes to market the networks have. The more the networks feel pressure on their cost bases the more this will help ensure a more balanced approach,” he adds.

 

Fast mover

“As a distributor we offer a closer working relationship and move quicker than the networks. Most dealers find stronger credit facilities from HSC compared to working direct. We have access to the entire Carphone Warehouse stockholding so you only need one account for multi network airtime and all your hardware requirements. This gives the dealer no need to forecast or get stuck with stock,” he states.

Pestana says that dealers should also be wary of franchise offerings: “Franchise schemes relinquish all true independence. You may as well be a network store. The main piece of feedback we received from the channel on franchise schemes, was they liked the idea of unified point of sale. Listening to this, and as part of building the HSC service proposition, HSC felt the need to champion the independent dealer in this area. The industry as a whole has been poor at supporting the channel and keeping the information up to date.”

HSC undertook a comprehensive survey of its customer base asking what its dealers specifically wanted from a distributor in an ever changing climate. This feedback produced three main elements that the business has taken on board: knowledge; service; and relationships. These elements have become the building blocks of The Mobile Club.

Pestana states: “As part of the knowledge suite of benefits, we offer a range of exclusive bespoke training modules and a highly trained technical support team. We’ve upgraded our website, yourhsc.com, to offer a range of useful services including an online ticketing system, where dealers can ask any question, however technical and the answer will be sent back to them immediately. For VIP members we even offer personalised training sessions and tailor made modules with induction courses to mobile, fixed and IT for new dealer employees.

 

Mobile Club VIP

“Probably the biggest success has been the recent Mobile Club VIP tour. Our senior technical consultant personally visited all of our VIP members delivering a course on mobile messaging, O2’s new Mobile Landline, mobile broadband and indirect revenue opportunities from mobile applications,” he continued.

Yet not all resellers are able to sell converged solutions properly, states Pestana: “Converged products are now here but there is no one dominant channel, and only a few resellers skilled enough to deliver the complete proposition. In turn, there’s a lot of hot air but no one distributor has fully mastered this yet.”

HSC is tackling convergence from various angles, adds Pestana. It is working within the channel to break the sales and service barriers that selling this new technology brings, while working closely with key vendors including the networks and manufacturers to deliver their products. “Evaluating the products that particularly strengthen the independent mobile dealer’s proposition is important to HSC,” continues Pestana. “HSC is in the process of building a converged forum of resellers and suppliers from a mobile, fixed or IT background, that is truly capable of delivering these propositions. We are positioning HSC as a central hub to pull together the various components of converged solutions.”

 

Shrinking sector

On how HSC feels about the diminishing number of distributors in the mobile sector, Pestana notes: “I feel that this consolidation is inevitable and I am convinced that HSC will ultimately win the mobile distribution war. Doing the right things and underpinning your business with a solid platform of resellers, processes and employees pays long term dividends. I feel it’s important a distributor has the flexibility to move and change quickly with the market while keeping the levels of service high.

“By being the dealers’ champion, regularly listening to our customers and responding with a clean set of benefits that will enhance their businesses will keep us ahead of our competitors. Making it easy to deal with is always a priority for us.”

2010 is set to be an interesting year for HSC. Pestana concludes: “The industry as a whole will continue to squeeze cost duplication out and consolidate at almost every level. Technology will continue to provide huge opportunities for those capable of capitalising on them. HSC will gain even more ground in the mobile distribution war becoming a major UK distributor in hardware. We will also bulk up our software product category. We will make significant strides towards taking up a top position in the new converged communication channel,” he predicts.