5/14/2008 12:21:00 PM
Beyond UK mobile for Carphone
If anyone was in any doubt that the tectonic plates are shifting in independent mobile retail, Carphone’s deal with Best Buy makes the case loud and clear. Selling mobile contracts for networks appears to have little foundation as a long-term business model, so Carphone and Phones 4u have looked to new business models: diversifying into other products, and, in Carphone’s case, looking at other countries and building its own broadband network.
The Best Buy deal began as an expansion move into America Ð a mobile market further behind the UK on the growth curve. Now, there is even less reliance on the UK mobile market, with a new venture that sees Carphone and Best Buy partnering on the out-of-town ‘Big Box’ format, encompassing a range of electrical products. There is certainly a gap in the market, but there is a line of corpses along the way from Rumbelows to Dixons.
The £1.1bn deal sees Best Buy partner with Carphone for the whole of its retail business, and this has been interpreted in some quarters as founder Charles Dunstone shifting slowly to the exit door. He has denied this, but the deal certainly makes it easier for him to go in the future. Prior to the deal, a complete sale would have been very difficult. Dunstone has been pivotal to the business, and there is value in Carphone with Dunstone simply being in the operation.
The new joint venture that includes BigBox puts Dunstone’s two lieutenants, Roger Taylor and Andrew Harrison, in the limelight, along with senior directors from Best Buy, particularly Bob Willett, Best Buy’s international CEO, making it less sensational if Dunstone was to step aside. Dunstone will now switch his focus to his legacy: building the country’s biggest broadband business.