| Type | Public |
|---|---|
| Industry | Telecommunications |
| Founded | 1989 |
| Founder(s) | Charles Dunstone |
| Headquarters | North Acton, London, United Kingdom |
| Key people | Roger Taylor, CEO Charles Dunstone, Chairman |
| Products | Home and Mobile telephone equipment and services |
| Revenue | £4,825 million (2011)[1] |
| Operating income | £337 million (2011)[1] |
| Net income | £840 million (2011)[1] |
| Employees | 4,055 (2009)[1] |
| Subsidiaries | Best Buy Europe (joint venture with Best Buy) Virgin Mobile France (47.5% holding) |
| Website | cpwplc.com |
Carphone Warehouse Group PLC (LSE: CPW), known as The Carphone Warehouse, is Europe's largest independent mobile phone retailer, with over 1,700 stores across Europe. It is based in the United Kingdom and is a 50% subsidiary of Best Buy. Outside the UK and Ireland, the retailer is named The Phone House.
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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,[2] 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,[3] 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"),[4] 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[5] - to become the third partner, later taking up the role of Logistics and Distribution director.[6]
Ross led the footprint development of the company, under The Phone House brand, across Europe and the United States.[7] 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.[8]
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,[7] sold the majority of his stake in 2001 and retired with his young family to his holiday home in Portugal.[6]
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.[8] Ross became deputy chairman in July 2005,[9] and by 2008 was a non-executive director. Ross resigned from the board in December 2008 over an issue with shares.[10]
The group split in March 2010, with TalkTalk and New Carphone Warehouse becoming publicly listed companies. Charles Dunstone became Chairman of both companies. New Carphone Warehouse holds a 50% stake in Best Buy Europe and a 47.5% share in Virgin Mobile France. Dido Harding became CEO of TalkTalk and Roger Taylor CEO of New Carphone Warehouse.[11]
| Year | Month | Event |
|---|---|---|
| 1989 | The Carphone Warehouse launched | |
| 1994 | Carphone Warehouse Insurance launched | |
| 1996 | First Phone House stores open outside of the UK, in Paris and Dublin | |
| 1999 | January | Acquisition of Tandy (UK only) for £9m[12] |
| 2000 | July | IPO on main market of London Stock Exchange at a price of GBP£2.00 per share |
| 2001 | June | Acquisition of Cellcom for £9.1m[13] |
| 2002 | Acquired Opal Telecom | |
| 2003 | TalkTalk brand launched | |
| 2004 | January | Acquisition of e2save for £4.7m[14] |
| March | Acquisition of Xtra in Spain for £11.6m[14] | |
| November | TalkTalk Broadband launched | |
| 2005 | March | Acquisition of OneStopPhoneShop for £15m[15] |
| December | Acquisition of Tele2 for £11.5m[15] | |
| Acquisition of One.Tel for £169.6m[15] | ||
| 2006 | April | "Free" TalkTalk broadband offer launched[16] |
| October | Acquisition of the access business of AOL UK for £370m[17] | |
| Vodafone switches its contract business to Phones4U[18] | ||
| November | Launch of a MVNO in Spain under the brand "Happy Móvil" | |
| 2007 | January | Suspension of the Big Brother sponsorship deal. |
| May | Roll out of Geek Squad nationwide. | |
| June | Three-year £7million X Factor sponsorship deal signed.[19] | |
| July | Carphone Warehouse offers free laptop with AOL Broadband (counter-offer of PC World's free laptop with Orange Broadband deal). | |
| September | The Carphone Warehouse joins the FTSE100 | |
| 2008 | May | Carphone announces £1.1bn takeover by Best Buy |
| 2010 | March | Carphone and TalkTalk split to create two separate publicly listed companies |
In May 2008 Best Buy agreed to buy a 50% share of The Carphone Warehouse plc for £1.1 billion to launch the Best Buy Europe joint venture.[20] The first store is set to be open in Thurrock, Essex.
Mobile phone e-tailers e2save (OneStopPhoneShop and The Phone Spot) and Mobiles.co.uk are separately managed divisions within Carphone Warehouse.
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.[21]
Geek Squad currently offers 24 hour nationwide 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.[22]
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.
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". 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.
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. However, because the Carphone Warehouse and Talktalk have split, Talktalk have taken over the sole sponsorship of the X factor.[23]
The company were the sponsors for the UK's version of Big Brother from 2004 to 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.[24][25]
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.[26]
On 8 March 2007, the company permanently dropped its sponsorship of the show.[27]
In April 2011, The Carphone Warehouse sponsored the Appy Awards, calling them "the UK’s first major app awards ceremony designed to recognise innovation and development in app technology".[28]
In 2001, The Carphone Warehouse established a corporate partnership with Get Connected UK that continues today. The Carphone Warehouse supplies Get Connected with office and helpline equipment and it has been instrumental in ensuring it is free to call from all landlines and mobiles.[29] This partnership won the Charity Times Corporate Partnership Award in 2003 and the Third Sector Excellence Award for Corporate Partnership in 2006.[30]
The Carphone Warehouse has a long history of inadequate treatment of customers, including unacceptable damage to the credit history of former customers and leaving customers. One of the largest body of complaints regarding mobile phone suppliers on the web is to be found relating to Carphone Warehouse.[31] [32] [33] [34] [35] [36]
The Carphone Warehouse announced that it would purchase the UK business of AOL on 10 October 2006 for £370m.[17][37][38] 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.[39][40]
The acquisition process completed on 9 December 2006.
It has also been stated in their press release[17] 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.[41]
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.[42] 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".[43]
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.[44]
AOL customers, welcome to the Carphone Warehouse family
I want to reassure you that we have no plans to change the service in any way at all. It will continue to be run by the existing team and will work, look and feel just as it does today. We have entered a long-term deal with Time Warner to keep providing the AOL content and we don't want to mess with what has clearly been a very popular product to date. In the New Year, all AOL customers will be offered the choice of transferring to Free Broadband if they want, by moving their line rental to TalkTalk and signing up for our Talk3 international telephone service. There will be continuity of service with the ability to take your AOL email address to TalkTalk and access to much of the content you previously enjoyed.— Charles Dunstone, 13 November 2006[45]
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.[46]
In January 2007 AOL UK was rebranded as AOL Broadband.
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, all those who used P2P applications heavily had their downstream bandwidth limited to 50 kbit/s during peak times (18:00-24:00, Sunday to Thursday).[47]
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[48] 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.
On 8 May 2008, Charles Dunstone revealed Carphone Warehouse's biggest move to date: a £1.1bn takeover by America's largest electrical retailer, Best Buy.[49] 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.[50]
On May 8, 2009, Carphone Warehouse became Britain’s second largest broadband provider after BT after it agreed to pay £236m in cash for the UK assets of Tiscali, the Italian telecoms group. The business was later rebranded under the existing TalkTalk brand.[51]
The Carphone Warehouse has acquired four former competitors mobile phone e-tailers e2save, The Phone Spot, Mobiles.co.uk and OneStopPhoneShop. Orders are fulfilled through the Carphone Warehouse, but each company has its own terms and conditions and, significantly, rules regarding promotions.
These subsidiaries offered 'cash back' redemption on entering into a contract; customers had to 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.[52]
During 2005, TalkTalk's proactive sales techniques drew criticism in the press when it was accused of practising "slamming" to win new customers. [53] Customers who bought mobile phones from Carphone Warehouse retail outlets alleged that their landline accounts were subsequently switched without their consent .[54]
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.[55][56]
On 28 October 2006, in a Times interview, Richard Thomas, Britain's Information Commissioner, stated:[57]
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.
- "On 1 January 2004, the Group acquired 100% of the issued share capital of E2save.com Limited, a company registered in England, for an initial gross consideration of £1.4 m, with a further contingent deferred consideration of up to £3.3 m payable over two years."
- "On 8 March 2004, the Group acquired 100% of the issued share capital of Xtra Telecom SA, a fixed line service provider registered in Spain, for an initial gross consideration of £7.5 m, with a further contingent deferred consideration expected to be up to £4.1 m payable over two years."
- "On 1 March 2005, the Group acquired 100% of the issued share capital of One Stop Phone Shop Limited, a company registered in England and Wales that specialises in the mobile ‘off-the-page’ market, for an initial gross cash consideration of £8.3 m, with a further contingent deferred consideration of up to £6.7 m payable over two years."
- "On 16 December 2005, the Group acquired 100% of the issued share capital of Tele2 UK Communications Limited (Tele2 UK), a company registered in Englandand Wales, for a gross cash consideration of £11.5 m. Tele2 UK is involved in the provision of telecommunications services to residential customers."
- "On 19 December 2005, the Group acquired 100% of the issued share capital of Centrica Telecommunications Limited, Onetel Limited, Telco Holdings Limited, Awardmodel Limited and their subsidiaries (Onetel), all of which are registered in England and Wales, for a gross cash consideration of £169.6 m. Onetel is involved in the provision of telecommunications services to both residential and business customers."