Michael House has an open and frank chat with four of the more senior personnel in the dealer space. They discuss the market’s shape, the burning issues and attempt to decipher what the rest of 2011 will bring
Few could deny the independent channel has faced some challenging times over recent years, be it networks pulling away from consumers, constant consolidation reducing numbers, and the usual commissions cost due, in part, to the decline of voice revenues.
In more recent times, some dealers have even been forced to exit the industry, because their business model doesn’t suit, or cannot adapt to, the payment methods of on-going revenue that has become virtually the industry standard.
Those that have survived are, by and large, the ones who have adapted in what is fast becoming an unrecognisable industry to the one in which many started off.
Data has become an essential sale for survival, effectively filling the financial void from voice. But with data revenues heading the same way, the importance of unified communications is fast becoming the key for any future growth and indeed survival.
Dealers are increasingly adopting new products and services to take a slice of this market. And with operators launching products such as Pocket Landline with Orange, One Net and One Net Express with Vodafone and Joined Up Communications with O2, many dealers are devoting their business to a single operator, instead of offering the full suite.
With all this in mind, Mobile News spoke to Sunrise Associates director Chris Jones, Sprint Communications MD Paul Leonard, Walk and Talk Mobile MD Dipak Vora and Next Communications MD Mark Finlayson, to discuss all things good and bad about the current market.
What’s the burning issue in your part of the industry right now?
Paul Leonard (pictured top right): Data is the biggest issue. We need loads more capacity, because we are in a situation where we have this large uptake of Android. This, coupled with the data requirements from tablets and smartphones, is eating away at data at a rate nearly impossible to keep up with.
To deal with this we need to build networks that are really data tolerant rather than voice, which is becoming more secondary now. It’s essential.
Mark Finlayson (pictured bottom right): The pressure on margins. Some manufacturers, particularly Apple, are making it difficult to make much margin on their hardware, because we have to pay the same amount for one of their devices as the man on the street. It’s not a great model for us, but it’s a device we have to be seen to have.
Chris Jones (pictured top left): The phrase ‘burning issue’ to me suggests a problem. But I don’t think there is a problem in the industry at the moment, just some big opportunities. These revolve around how the market is expanding into things like fixed-line and convergence in particular. We genuinely feel that with some of the offerings from the networks, there has never been a better time for us to do converged sales.
Dipak Vora (pictured bottom left): Being focused on retail, we face different issues to those in B2B – upgrades being one. At the moment we are finding that T-Mobile is actively calling our customers direct when an upgrade is due, so unless we hear about it and have the opportunity to intercept, we lose out on the sale. They are ringing them up and saying: “If you do the upgrade through us, we can offer you a better deal.” Obviously, when a handset is released it takes time before the dealer can get that handset and the operator can, so that’s hard.
Dipak, we often hear how tough retail can be for the independent channel. As the only retailer in this forum, tell us how you view the consumer market today.
Vora: It’s hard and only getting harder. There are lots of handsets that dealers haven’t been able to get their hands on. For example, when the iPhone 4 was released last year, some of my customers waited for a few months to get one through us. In the end, we had to tell them to go and get it directly, as we just couldn’t get the stock. But we keep battling on.
Retention seems to be a key word, certainly from the operators. But with acquisition targets still remaining, what are you doing to get customers onboard?
Jones: The main thing would be consultative sales. Instead of going in with a preconceived idea about what they are going to have, you go in and talk to them about where they are at in terms of their communication requirements, and what their business wants to achieve. We are then able to go away and professionally put something together to facilitate those requirements and make them better prepared for the future.
Leonard: At the moment it is centring around data. So what we have to be careful about is not overselling customers’ expectations. Some people believe they can stream things like BBC iPlayer on their phone using mobile internet. We need to make sure we aren’t promising them things that aren’t going to happen.
Finlayson: It’s increasingly difficult to get new business and build your client base. Everyone is trying to do the same thing. We have been down various routes – telesales and email shots – but the response has been very poor, making the cost of enquiry very difficult. We will need to keep plugging away.
Vora: In our case, it has to be about customer service. Our service has always been extremely good – some of our customers come from far away to do their upgrades with us. They also come in if they need any help with their handsets. We have to be good at this and keep our staff well-trained to keep our customers.
Full article in Mobile News issue 488 (May 9, 2011).
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