Nobody won from Vodafone’s withdrawal

Nobody won from Vodafone’s withdrawal
Maybe it was the sunshine, but it felt like the earth was shaking under the industry this week. In seven days we’ve had operators briefing us on buying Phones 4u, credible reports on Vodafone buying T-Mobile and a speeded up return of Vodafone into Carphone Warehouse. The appetite from operators to change the dynamics of the industry appear greater than ever. Let’s stick with Vodafone’s return to Carphone. The ostensible goal of cutting Carphone’s power in the market in 2006 has arguably not been met, but both Vodafone and Carphone have been greater victims (as all companies in the industry have) of the saturated UK market and the recession.

There was also more than a hint of egos dictating the initial withdrawal that provoked jaws to drop. Carphone’s then trading/commercial director, John Durkan, bristled suppliers with a hostile style familiar for FMCG suppliers to supermarkets, after Carphone chairman John Gildersleeve identified the need for toughness and rigour in Carphone’s supply chain.

Vodafone’s UK CEO Nick Read and commercial chief Ian Shepherd were antagonised by both the style and the direction Carphone was taking at the time. The decision doesn’t seem to have favoured any of the parties directly, or even indirectly, involved. Repairing the relationship seems born out of maturity and expediency.

There are some logical questions now. Will Carphone’s current preferred network suppliers, O2 and Orange, be justified in being concerned about their sales at Carphone with the addition of Vodafone? Are Vodafone sales at Carphone incremental? If not, which network will pay the price? And what of Phones 4u? Will it renegotiate its terms with Vodafone as a result?

Initially, Carphone will allow its staff to bask in the validation in the independent retail model, and that it is here to stay. It is a worthwhile exercise to repair any anxiety inside and outside the business ever since that dramatic day in October three years ago.
Written by Mobile Today
Mobile Today


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