The Carphone Warehouse Group PLC (), known as
The Carphone Warehouse, is
Europe's largest independent
mobile phone retailer, with over 1,700 stores across Europe. They are based in the
United Kingdom. Outside the UK and the
Republic of Ireland, the retailer is named
The Phone House.
History
The company was co-founded in 1989, when most portable phones were too bulky to carry and called
car phones, by current CEO
Charles Dunstone. Dunstone put £6,000 into the company from his savings, and then called his old school friend and
Chartered Accountant David Ross, who agreed to become
Finance Director. Based originally in Dunstone's rented flat on the
Marylebone Road,
London, four years later the company had grown to 20 stores. Now also trading as
The Phone House, Carphone Warehouse is
Europe's largest independent mobile phone retailer.
While Dunstone became the public face of the Carphone Warehouse, Ross (described by Dunstone as his "secret weapon"),
developed and drove the high street retail footprint of the company by buying
Tandy in the UK. Dunstone approached old customer
Guy Johnson of
NEC UK - later described by one City analyst as "the
Ringo Starr of Carphone Warehouse" for being in the right place at the right time - to become the third partner, later taking up the role of Logistics and Distribution director.
Ross led the footprint development of the company, under
The Phone House brand, across Europe and the
United States.
When Ross led the
IPO of Carphone Warehouse in 2000, it had been so successful that the partners had not needed to borrow or involve outsiders: Dunstone owned half, Ross a third, and Johnson most of the rest.
Only Johnson of the three partners had a family, and having according to media reports becoming less enamoured by the Ross-led European expansion of the organisation,
sold the majority of his stake in 2001 and retired with his young family to his holiday home in
Portugal.
While Ross had been joint-
Chief Operating Officer with Dunstone from 1990 and 2003, whereas Dunstone stayed with the business that he still runs today, Ross started to give up his executive position from 2003.
Ross became deputy chairman in July 2005, and by 2008 was a non-executive director. Ross resigned from the board in December 2008 over an issue with shares.
Timeline
Divisions
TalkTalk
TalkTalk is the home telecommunications branch of The Carphone Warehouse.
Carphone Warehouse also own Opal Telecom, a business to business telecoms provider with a popular switch. It may be construed as a conflict of interest that some of the competitors of TalkTalk such as Toucan (part of IDT Direct Limited), use this switch.
Mobile phone e-tailers
Mobile phone e-tailers
e2save, The Phone Spot, and OneStopPhoneShop are separately managed divisions within Carphone Warehouse. Vanilla mobile fulfillment service is the distribution side of Carphone Warehouse, and is based within e2save.com
Geek Squad
In October 2006 it was announced that
Geek Squad would be launching in the UK in a 50/50 joint venture between Carphone Warehouse and
Best Buy.
Geek Squad currently offers 24 hour over-the-phone technology support and in-home technical support in the North-West of England and Greater London with surrounding area.
In 2008 the Carphone Warehouse is increasing its joint venture with Best Buy by launching Best Buy Mobile as a "store inside a store" inside of Best Buy's or as a separate store located by Best Buy stores throughout the United States. The labor will be split between the two companies. In the same business venture Carphone Warehouse was split into four parts (half retail and half broadband) and one quarter sold to Best Buy for a sum nearing 1.1 billion.
Repairs
The Carphone Warehouse has the largest Mobile Phone repair service in the UK, and repair centres in all of the countries it is actively trading in.
Marketing campaigns
In the 1990s Carphone Warehouse became well-known for using the
Stereo MCs' "Connected" in its advertisements.
Mowbli, the little mobile phone, is Carphone Warehouse's mascot. He appears mainly in radio advertisements with his friend Ed (voiced by the Irish comedian
Ed Byrne), and also on television advertisements. Mowbli was dropped in 2008 and replaced by hand drawn characters and a hand drawn logo to "Bring back its image of Simple Impartial Advice". Mowbli has since been dropped by Carphone Warehouse, and the retailer has returned to the old strapline 'Simple, Impartial Advice'. This reflects the businesses foray into wireless products including laptops, netbooks and games consoles. The retailer has opened up its product offerings from just mobile phones; the decision to ditch Mowbli could be a indication that the retailer is poised to offer an even larger range of consumer electronics.
The X Factor (UK)
As of 19 June 2007, the Carphone Warehouse became the official sponsor of the fourth series of
The X Factor. The sponsorship deal stands to last for three years. The Carphone Warehouse will also be the sponsor of its various spin-offs, including The Xtra Factor.
Big Brother (UK)
The company were the
sponsors for the UK's version of
Big Brother since series 5 in 2004, until 2007. In 2006 they also sponsored
Celebrity Big Brother and related
Celebrity Big Brother shows on
Channel 4.
On 17 January 2007, in response to
alleged racism in Celebrity Big Brother,
Charles Dunstone said: "We are talking to
Channel 4. The sponsorship is constantly under review. Clearly we are against racism. Most people understand that the person who has their name associated with the programme does not necessarily condone the content.
On 18 January 2007, Carphone Warehouse announced that it had suspended its sponsorship of the show as Channel 4 had not taken sufficient action in response to the alleged racism in the show.
On 8 March 2007, the company permanently dropped its sponsorship of the show.
Mergers & Acquisitions
AOL UK
The Carphone Warehouse announced it would purchase the UK business of
AOL on 10 October 2006 for £370m.
This makes Carphone Warehouse the 3rd largest broadband provider, with over 2 million customers, and the largest
LLU Operator with more than 150,000 LLU customers.
The acquisition process completed on 9 December 2006.
It has also been stated in their press release
that AOL UK
Audience business will remain a separate organization and brand with a
revenue sharing agreement. It is not yet clear if the AOL UK
Access business (the broadband part) will be fully integrated into Carphone Warehouse, however the name of this business has been changed to
AOL Broadband.
AOL Broadband customers will not be automatically transferred to Talk Talk.
AOL began consulting on job cuts in 2006.
The Times reported that the company expected to cut a total of 500 UK jobs by Christmas. In line with legal requirements, AOL UK (now
AOL Broadband) notified the
DTI that redundancies are planned. The
Press Gazette stated "The company has informed the DTI that it is possible that it will make more than 100 redundancies".
On 1 November 2006, it was made public that Karen Thompson, AOL UK CEO and President AOL Europe, had resigned and had been succeeded by Carlo d'Asaro Biondo (previously CEO of
AOL France). Thompson was part of the team responsible for launching AOL UK in 1996.
It was made public on 14 December 2006 that Carlo d'Asaro Biondo had resigned after only six weeks in his new role. Philip Rowley (the chairman of AOL Europe) has taken over on a temporary basis. The Guardian states:
the management turmoil has put the European operation in "freefall" and created a "massive vacuum", according to one AOL insider. The same article estimates that 5,000 AOL jobs are to go worldwide (25% of staff) with a significant number from AOL UK.
In January 2007 AOL UK was rebranded as
AOL Broadband.
Service changes
In an early press statement, The Carphone Warehouse stated they had "no plans to change the service in any way at all," but, since January, anyone heavily using P2P applications have had their downstream bandwidth limited to 50 kbit/s during peak times (6pm-midnight, Sunday to Thursday).
Marketing offers and problems
During the third quarter of 2007,
AOL Broadband caused a stir by offering a free laptop computer (and eventually a free Playstation 3) to all new customers signing up for a 24 month contract with its AOL Broadband Wireless Plus broadband package. While sceptics looked for a catch, industry experts conceded that the offer was reasonable, despite the necessity to sign up to an AOL Talk home phone package in order to be eligible for the free laptop. While an option to not take a bundled home phone package was available, the price increased by £10; further offers include a free
Xbox 360,
PlayStation 3 and
Wii in addition to other promotional items.
Best Buy
On 8 May 2008 Charles Dunstone revealed Carphone Warehouse's biggest move to date: a £1.1bn merger with America's largest electrical retailer,
Best Buy. The deal has paved the way for Carphone to split its telecom and retail businesses - a move expected to be completed by March 2010. As part of the detail, a radical new direction has been undertaken for the its retail arm. Big Box out of town stores will be launched to compete with Curry's and Comet, selling electrical goods from TVs to fridges. Meanwhile Carphone's fleet of telecom outlets will be supplemented by new format Wireless World stores targeting connected home entertainment products, laptops and gaming. Investing in such diverse retail distribution is a gamble, but gives The Carphone Warehouse a foothold in businesses with current and future potential.
Tiscali
On May 8 2009, Carphone Warehouse became Britain’s largest broadband provider after it agreed to pay £236m in cash for the UK assets of
Tiscali, the Italian telecoms group.
Former competitors
The Carphone Warehouse has acquired four former competitors, mobile phone e-tailers
e2save, The Phone Spot, and OneStopPhoneShop. Orders are fulfilled through the Carphone Warehouse, but each company has its own terms and conditions and, significantly, rules regarding promotions.
Marketing offers and problems
These subsidiaries offered 'cash back' redemption on entering into a contract; customers must send in bills and vouchers to claim back line rental paid to the network. This has proved problematic for many customers.
In the case of the OneStopPhoneShop and
e2save customers have had a history of problems in claiming their cash back. OFCOM, the regulator, has admitted receiving many complaints about the behaviour of these two companies but no action has yet been taken.
Data protection
During 2005 TalkTalk's proactive sales techniques drew criticism in the press when it was accused of practising "
slamming" to win new customers.
Customers who bought mobile phones from Carphone Warehouse retail outlets alleged that their landline accounts were subsequently switched without their consent
.
On 15 August 2006, the
Information Commissioner's Office issued Preliminary Enforcement Notices for breaches of PECR (The Privacy and Electronic Communications Regulations) against Carphone Warehouse and
TalkTalk for making marketing calls to people who are
signed up to the
Telephone Preference Service (TPS) or people who have asked that the company make no further calls to them.
On 28 October 2006 in a
Times interview
Richard Thomas, Britain's
Information Commissioner, stated:
We’re taking action against some of the telecom companies, Talk Talk and Carphone Warehouse. We’re taking action against them because we’ve had a lot of complaints that they’ve been telephoning people with marketing calls, people whose name is on the telephone preference service. And then we do these prosecutions, particularly with private detectives. We’ve got a big case coming up.
Standard Operating Platform
On the 22nd June 2009, The Carphone Warehouse launched its 'Standard Operating Platform' named how2, the system was developed in-house on the Nimbus Partners Control 2007 platform. As many as 40 people from across the Retail business contributed to the SOP and helped design, build and document the platform and its processes. The key aim of the programme was to standardise and then improve the way process is documented, then in turn improve the service delivered to Employees who directly deliver service to Customers.
See also
