4/30/2009 11:33:00 AM
UK dealer base falls by 30% in last 12 months
The number of independent dealers actively trading has fallen by up to 30% in the past 12 months, as many have either voluntarily left the industry or gone bust.
The drop, which distribution chiefs said was between 10% and 30%, reflects the overall steady decline in volume of independent dealers chasing
an ever decreasing number of connections.
Estimations on the decline are based on numbers from all the major distributors and the Independent Mobile Phone Dealers Association (IMPDA).
Over a longer period, the number of actively trading dealers is believed to have almost halved to between 1,000 and 1,200 from 1,800 two years ago, say observers.
However, the number of large dealers with over 100 connections per month is believed to have dropped more sharply to around the 300 mark.
Distributors are hopeful that the rate of decline in the number of dealers could be ‘bottoming-out’. Many hope that the IT resellers looking at IT-mobile convergence will boost the available pool of dealers and resellers.
Insiders said the decrease had been caused by a combination of factors including networks becoming better at retaining customers, an increase in network shops and multiple chains, as well as better deals exclusively sold by networks’ direct channels.
Large proportions of those closing down are consumer dealers and call centres.
In October 2008, T-Mobile cut 500 stockists – and it is understood that at least 400 of those were dealers that were already inactive.
One dealer said: ‘It’s harder work for less money, competition is more fierce, money commissions have decreased, networks make deals that you can’t match and for some, revenue share is the nail in the coffin.’
Distributors maintain that more progressive business dealers continue to thrive if they adapt to new products and services and towards a retention-based model rather than one based on new connections.
One distributor said: ‘Consumer dealers who have failed to morph into business dealers have suffered.’
Meanwhile, many dealers are now looking for a second income from fixed-line business. Chris Caudle from the IMPDA said: ‘Certainly the days of dealing solely in mobile are over, but dealers are still very important – if every independent went out of business then networks would be in trouble.’