UP AT THE SHARP END

UP AT THE SHARP END

Paul Marks, managing director

Paul Marks, managing director, Fonefi nders & Mfonex

 
Sohail Ratansi
Sohail Ratansi, managing director, Fones U Like
 
Chris Mayers
Chris Mayers, managing director, Border Mobiles

Each month the IMPDA asks a panel of dealers how they feel about the hottest topics affecting the channel community. This month, we are looking fi rstly at 2008. Last year was a struggle for dealers all over the country, with major changes in the way dealers are paid commission, to the culling of a lot of dealers. The public are not spending as much as they used to and with the credit crunch, life is diffi cult for dealers. What do you think will happen in 2009? Will life be made easier for dealers or do you think with all the changes, this is the beginning of the end for independents?

Chrisse Mayers, managing director at Border Mobiles:
Border Mobiles fi rst started in April 2004. It is based in the small town of Hawick on the border of Scotland and England. It is a small family fi rm supplying mobiles via its website and from out of its own shop: Life in 2009? I think the networks will carry on the way they have been doing so far through 2008, trying to squeeze as much out of the package as they can, and probably getting away with it for a while. Independent dealers are getting a raw package at the moment, it has to be said, although this only benefi ts the customer. Most of my customers think I am being greedy if I don’t match what the networks direct can offer, and simply don’t understand that its an impossibility to match some of the deals.

As long as the handset prices remain the same, I think many pay as you go customers will simply choose cheaper handsets, which from a margin point still earns roughly the same cash amount. For contract customers, most still want the best they can have for the least amount payable; if this means switching networks then I think the network offering the best deal via the independent channel will get the connections.

The independent channel has changed dramatically since its beginning, probably none more so than the last year. As long as independents cannot match the network offers, then sad as it is to say, I think the independents are extremely at risk, even those who are long established. I think 2009 will see dealers cutting costs where possible, and offering more and more extra services to keep the customers. Hopefully the customer will eventually see sense that the independents really do offer impartial advice. This is the only situation in which I see a way forward for us.

Sohail Ratansi, director, Fones U Like:
Sohail has been involved in telecoms since 1996, from a retail job to Cable & Wireless to a break in banking, then back to the mobile industry. He set up Fones U Like in 2006, starting in consumer, and moving into B2B. Now, 95% of the company’s business is B2B: 2008 has seen a lot of change both bad and good; O2’s controversial and poorly executed commission structure change, T-Mobile’s dealer cull, the emergence of the IMPDA to tackle issues that the independent dealers face regularly, some great new handsets, and more.

The emergence of the mobile broadband packages means that indie dealers will need to start re-evaluating their current offerings. Gone are the days when voice and data convergence was specifi cally for the B2B market. This, along with the slow demise of cash back, means there is an alternative avenue of revenue available.

Also, a lot of independent dealers have started to unlock phones and carry our repairs, whilst reducing the amount of connections means the independent dealer market is changing considerably. 2009 will be tougher for us indie dealers, both consumer and B2B. The networks are having their own credit crunch crisis too, so will carry on relying on indie dealers to bring in the 65%

to 70% connections that have been the case over the last year or two. As I had predicted earlier this year retention deals will start to fade with networks currently not having the cash to keep their old non-profi table customers happy.

Paul Marks, managing director, Fonefi nders & Mfonex:
Paul Marks has been in mobiles since 2003, selling mobiles to the public and business. Based in Orpington in Kent, he fi rst founded Fonefi nders, then in 2006 joined and became operations director of Mfonex, an ecommerce solutions company, that’s head offi ce is in Manchester: No, I don’t think it will be the end of independents. They still have a great role to play in the mobile industry. That’s despite what the networks think.

Dealers just need to think about add-on’s. This appears to be the buzz word and this will bring in the money. Unlocking appears to be a favourite of many dealers and a lot of business is being done there.

2009 could see the end of the dreaded clawbacks and we all hope that the great work of the IMPDA comes to fore next year.

The networks need to talk to the dealers, and this is another of my predictions for 2009. Over 2008, we have been fortunate in starting talks with T-Mobile and 3. I reckon that the other networks will also be there, talking to us dealers in 2009. So we will be able to discuss a way to go and sort out our problems. This is something that we have been trying to do for years.

We can look forward to hopefully ongoing revenue in a form that won’t upset dealers, like a certain other network. If Orange does what is has said it will, I reckon that it will be the network of choice over the others as its solution appears to be so simple.

Hopefully we won’t see any more dealer culls that we have seen in 2008. Mind you, if they do happen, they will still look across the board at both the direct and in indirect ones; no one is safe.

 

MVNO’s are an avenue that many companies, like Mfonex and Topaz Mobile, are becoming well known for in the mobile market, with Virgin and Tesco in top positions. Do you think that more companies in 2009 will start to expand the MVNO market and target those business and consumers which the networks either cannot or are not bothered about? Indeed, is the MVNO an area that more dealers should be looking to get into?

 

Marks, Fonefi nders & Mfonex:
MVNO’S appear to be springing up everywhere these days in all forms, both pay as you go and contract, the latest being Tescos. Tesco is going from strength to strength and has made progress in leaps and bounds over the past three months.

In 2009 I can see more MVNOs appearing. They will all give low cost deals, which the main networks won’t do. All will have innovative tariffs that will be good for the customer, and cheap. They will also be both on consumer and business, so all types of customers will be covered.

Dealers should look at MVNO’s in a new light in 2009 and use them to their advantage, for instance, where a customer hasn’t got through a network credit check but they still want a mobile phone. This is where the slightly lower expectations of the MVNO are highlighted and can be used to the advantage of the dealer.

This will give dealers another network to target another audience through. Some dealers don’t pay attention to MVNOs and only give love to the bigger networks. But after the culls and what has happened this last year it pays to look for something else; you never know what is going to happen, and when something comes, it tends to come out of the blue.

Mayers, Border Mobiles:
MVNO’s are a way forward, because airtime is bought and sold there is more scope to adapt the packages to suit the individual. As an independent, the MVNO can offer a truly versatile, adaptable package will win customers. The problem will be getting consumer confi dence in the package, and getting a brand known nationwide.

Virgin has the potential to get out there onto the consumer market, and maybe by talking to many independents, it could come up with a great package for the consumer, one that could be tailored to each individual. All it takes it a bright distributor to lead the way, maybe even have an MVNO of their own?

Ratansi, Fones U Like:
I personally do not think MVNO’s will be as successful as they were once promised to be. This is with the exception of Virgin, and Tesco. The international calling MVNO’s are becoming popular, but as there is no real contract solution available I doubt it will attract more people than those who do make international calls.

Business MVNO’s will need to strengthen their offerings as business customers expect a lot more than just good customer service. It is important not to make their contract with the MVNO a living hell.

Unfortunately unlike the actual networks, the MVNOs do not have the cash to subsidies the handsets as much; this will again be a disadvantage to the customer and dealer alike. Also services like Blackberry or Seven will need to be available so that push email facilities can be offered.

Like all the networks, the MVNO’s will need to re-invent it self every few months in order to keep up with the competition and maybe to even stay ahead. Virgin already has a huge hold on the MVNO’s with their digital TV, broadband and mobile packages. Topaz is a great concept but until it expands it will need to be more than just another MVNO. To stay ahead it will need to offering a lot of the B2B services that customers want. I do try to offer Topaz to my customer base, but as my B2B clients will only consider 02, T-Mobile Orange and Vodafone. Most of them chuckle when I mention 3, even though 3 has a better data offering than Orange and O2!

 

The IMPDA (Independent Mobile Phone Dealers Association) is open to all UK dealers and distributors. The aim of the IMPDA is to achieve a level playing fi eld for its members, and to champion quality improvements in the industry for a better future. If you would like to join the IMPDA then simply email membership@impda.co.uk. If you have a concern or story then either email admin@impda.co.uk or call 0844 884 9702.

 
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