Carphone Warehouse is predicting another nine million Britons will sign up to 4G during the next year, with O2 and Vodafone’s entry into the market causing a ‘real fundamental shift’.
The independent retailer said by the end of September, a fifth of contract connections was opting for 4G products. Group CEO Andrew Harrison said the retailer was seeing a price premium between 10% and 15% on next generation contracts. He said he was confident that 4G would change the market as much as the introduction of the mobile phone did. He said: ‘None of us ever knew back then that the world was going to change and it was the technology that was going to change us.’
He said there had been a lull as consumers waited for 4G products from O2 and Vodafone to follow those of EE. Harrison said with the greater supply of 4G products, he predicted the handset replacement cycle would be speeded up ‘quite significantly’, with a boost to data bundles. He said: ‘There’s an insatiable increase in the need for data. Every time someone changes their phone, they increase their data by 50%. With 4G... it’s around three to five times.’
The retailer has backed the industry shift to 4G with its new Pin Point tablet sales tool. Staff have been kitted out with 3,000 tablets, allowing them to check network coverage instantly, show off 4G coverage across the networks and also show live tariffs. Harrison said Pin Point, in addition to dedicated 4G bays, would increase the retailer’s net promoter score and drive greater conversion of 4G sales.
Harrison said tablets would be top of most people’s Christmas lists this year, with Carphone Warehouse putting particular emphasis on tablet and phone bundles. He said the growing dominance of smaller tablets has mainly hit Apple, whose market share has moved from ‘70-80% to something like 30%’. He said: ‘If you look at Wi-Fi tablets, what you sell them for is pretty much what people buy them for. There’s not a great amount of margin in them. The important thing is we have an assisted sell programme so when people come in and buy them, we can increase the basket of services like insurance or accessories that we sell with it.’
The retailer’s group CEO was speaking to analysts after Carphone Warehouse reported a surge in pre-tax profits to £14m for the half year ending 26 September. Sales increased at the retailer by 8.3%. The group reiterated its prediction that it would earn between £140-£160m in profits this year.
Author: Graeme Neill