Those wearily returning to work after the Christmas break were met with the news that non-specialist retailers such as Argos and Woolworths had taken a massive pounding as handset sales volumes decreased, compared with the year before. To add insult to injury, Woolworths had already met its demise at this point, during the final quarter of 2008.
Meanwhile, Christmas had been a busy period in distie land too. T-Mobile ended its relationship with Avenir Telecom, with both network and distributor claiming the move was their own decision. That was not the only thing happening at T-Mobile. UK MD Jim Hyde announced he was leaving the company, resulting in a gaping hole at the top of the struggling operator.
And the plot thickened in a long running saga. Relations between Sony and its joint venture Sony Ericsson became even more strained when Sony refused to allow the manufacturer to use its PlayStation brand to make a PSP phone.
2009 was to be the year of the Sim-only deal and lower prices, starting with 3, which set a benchmark with its £9 per month contract.
The year of the smartphone also kicked off. It emerged that iPhone sales were up 88% in Q4 2008, while Nokia saw its profits tumble 66% to £542m.
This year became even tougher for Avenir Telecom when it was dropped by Vodafone. To add to the bleak winter, February also saw heavy snow, with 300 mobile retail stores closed due to the bad weather.
However, JAG was more fortunate. It averted collapse by going into ‘prepack administration’ after Lloyds TSB pulled its £2m overdraft.
And it was all change for 20:20 Mobile, which rebranded for its newly integrated handset and accessories business.
Meanwhile, Sim-only was really taking off by February, with each operator trying to outdo the other with the cheapest deal, as consumers chose to shun their upgrades due to economic conditions.
A large focus in February was Mobile World Congress. Along with hoards of handset releases, each with ‘smarter’ features than the last, RIM began its move into the consumer space. A new focus for Sony Ericsson was also revealed under the guise of an ‘Entertainment Unlimited’ brand and its new Idou (now Satio) handset – Walkman and Cyber-shot were to become a thing
of the past.
Nokia hit harder times when high levels of grey market trading from UK retailers and distributors emerged. But it wasn’t all doom and gloom for the manufacturer. Nokia’s CEO confirmed that the manufacturer was considering a move into laptops – a u-turn from April 2008 when it said there was no money to be made from producing the portable devices.
Things were also ramping up in the Sim-only market. First results of the year revealed that Sim-only, requiring a one month commitment, was rising, as prepay began to fall.
Meanwhile, Mobile exclusively revealed that O2 and Vodafone were in the final stages of a network share deal. The project sidelined Orange, which had previously signed an agreement with Vodafone in February 2007.
Things were still not looking good for Avenir. It won a court injunction against former MD Tanny Price and former client services chief Toby Wickenden to prevent them from working in their new roles at Vodafone.
Revenue share was also beginning to take shape. Orange revealed it was to introduce revenue share from 1 April with 10% deferred ongoing commissions and 90% up front.
Details of O2 and Vodafone’s network share were gradually filtering through, with news that technology jobs were at risk as a new division known as ‘Cornerstone’ was set up to handle the agreement.
It was also revealed that Samsung’s long standing sales director, Jon French, was set for a move to HTC – a manufacturer that would really make its name in 2009 as the Android operating system came to the fore.
It continued to be a good year for 3, which announced it had sold three
million dongles, and sales and marketing director Marc Allera revealed that the operator had opened up two new areas for growth – prepay and MVNOs.
April was a month for appointments. Mobile exclusively tipped Orange Romania veteran Richard Moat to be the new MD of T-Mobile UK. It also revealed that former Green and Blacks’ chief, Ward Crawford, was to take on the newly created role of COO at LG UK, as it was given some power back.
Nokia’s profits continued to slide, seeing an 88% fall to £107m for Q1.
Almost half way through the year, the frontline of the industry – retail – saw a lot of changes. Orange and HMV struck a deal for 15 initial concessions in a move reminiscent of 3 and Superdrug.
Orange was not the only company looking at its retail estate, Phones 4u opened a staff training centre in a bid to create better customer service levels in store. The independent retailer’s rival, Carphone Warehouse, scrapped commission across all 800 stores in a new strategy labelled the ‘New Deal’ by sales and customer director Steve Blan.
Intense Digital Britain discussions continued through the course of the month. Operators failed to agree on spectrum allocation before the 1 May deadline despite a £250m cash injection from the Government. It later emerged that O2 and Vodafone would be allowed to keep their current spectrum.
Meanwhile, new Sony Ericsson chief Nathan Vautier admitted ‘we do have quality issues’ after mass returns of the C905 in April. The manufacturer market remained volatile, with competitors changing market share position. Samsung looked to push itself back to number one with the Tocco Ultra.
Nokia launched Comes With Music for the second time in an exclusive three month deal with Orange and Phones 4u.
The independent side of the industry saw a number of high profile moves and appointments, as well as turmoil. During the course of the month, Brightstar recruited Tanny Price, who was charged with the responsibility of making the airtime business successful, and sales director Jolyon Bennett left the company after 10 years in the industry. Meanwhile, Avenir’s commercial director, John Doughty, left the business.
Elsewhere, independent retailer JAG was forced to cut 80 jobs after the taxman demanded a £1.6m VAT deposit and distributors were given the opportunity to tender for the £12m Orange accessories contract.
The operators were looking at ways to continue enticing customers onto their networks. O2 exclusively secured the iPhone 3GS and Vodafone pushed store staff to sell 24 month contracts.
T-Mobile made internal changes in preparation for the arrival of the new UK MD Richard Moat, amid speculation that the operator was on the verge of sale to a rival.
T-Mobile was not the only company to face growing speculation over its future. Rumours about Phones 4u began to emerge, with some senior industry figures touting the idea that an operator might buy the retailer.
iPhone rumours reached fever pitch in July, with sources across the industry claiming that another operator would soon be able to sell the handset.
O2 started its ‘Approved Scheme’, giving dealers access to the iPhone for the first time. The month continued with an O2 theme, as the network announced an exclusive on the Palm Pre, targeted the family market with the Joggler and launched ‘O2 Money’. It also emerged that 265 jobs were at risk in its technology department.
The retail sector was given a shake-up. Vodafone went back to Carphone Warehouse – three months earlier than planned, Orange announced a new retail strategy including a franchise scheme and Carphone Warehou