Mobile distributor 20:20 Mobile is stepping up its move into mobile services this year with the launch of a separate services division headed up by its channel director Jon Miller.
The services division will include 20:20 Mobile’s recycling, insurance, technical support, call centre and logistics outsourcing services. It is set for an immediate and major expansion with staff numbers doubling from 60 to 140.
20:20 Mobile MD James Browning told Mobile: ‘This is an area we want to focus on very heavily this year, which is why we have made it into a separate division.
‘Although we have strong handset and accessories businesses, the reality is that we can differentiate ourselves from our competitors by offering a service portfolio alongside handsets and accessories.’
Browning said he is confident the services business will deliver significant growth this year despite the tough economic climate, predicting a £10m turnover for the division by the end of the year. He said: ‘As smartphone use increases, our customer’s demand for additional services is growing. Services like data backup, ‘lock and wipe’ and secure software are becoming more and more important. We are seeing growing demand for these services from our customers and the potential for new clients too.’
Browning said 20:20 Mobile’s recycling business is a core element of the new division. The company runs its own recycling website, Phone Recycle Bank, which also supports its insurance replacement business, targeting specific phones to refurbish and supply to insurers’ replacement services.
It also runs recycling programmes for clients including Tesco, PC World and Dixons as well as for a number of b2b customers. The service includes a full Oracle enterprise system to track and trace every device.
Browning said: ‘We see more opportunity to grow that side of the business as more and more blue chip customers seek greater security for their customers’ devices, wanting to be sure, for example, that all data is wiped.’
He added: ‘I see our recycling business growing to three or four times the size it is now within 18 months. Recycling is also high on our customers’ agendas because they realise the value in recycling their own customers’ phones and recognise how that service is more likely to persuade their customers to take a higher grade of handset.’
Browning also said he forsees strong growth in the division’s outsourced technical support service this year. He said: ‘As the number of people using smartphones grows, smartphones become more complex and customers increasingly want to do more with [them], then the demand for technical support will also increase.’
The new services division will also oversee 20:20 Mobile’s call centre business, which currently handles a number of blue chip clients including O2’s insurance programme, Tesco and Dixons’ contract connections and BT’s end user deliveries.
Browning: Accessories business ‘to double in 2012’
Accessories will be another area of focus for 20:20 Mobile, with its MD James Browning predicting a 70% share by the end of 2012.
The bold prediction comes as competition within accessories becomes increasingly fierce.Earlier this month, Groupe Avenir launched the standalone business Avenir Accessories in the UK. Browning said: ‘The business grew significantly last year and we are looking to grow it still further this year as the accessories market continues to expand. Turnover grew by 15% in 2011 and we expect it to grow by a further 15% this year. We are predicting we will have close to 70% of the accessories market by the end of the year.’
He claimed the wholesaler’s accessories deals with Virgin Media, Everything Everywhere and Phones 4u in 2011 had set the foundation for further growth in the sector.
The deal with Phones 4u is seen as a coup, bringing the company its first accessories contract with the retail giant. Browning said: ‘It is the first time we have broken into Phones 4u and we won a large part of its accessories business.’ 20:20 Mobile is also carving out greater share of Everything Everywhere’s accessories business, having won the contract to build the operator an accessories website that will serve both Orange and T-Mobile.
‘We have always traded with T-Mobile and Orange and we have done well out of the joint venture between the two operators,’ Browning added.
This year the distributor is turning its sights to growing its existing accessories business and winning new deals. ‘Some growth will come from our existing contracts and obviously we have plans for other accessories deals which we would rather not reveal to our competitors,’ he said.
Browning added that he was looking to source better prices from Far East suppliers and also ship by sea rather than air to cut costs. He said: ‘We also need to work with our branded suppliers to help them see off the challenge from lower priced products with new packaging ideas and new licensing agreements.’