Eyebrows were raised earlier this month when mobile industry veteran Tim Whiting stepped down as Phones 4u’s CEO to take on the role of non-executive director.
With Phones 4u preparing to square up to the newly merged retail giant Dixons-Carphone and facing increasing competition on the high street from network operators, many questioned the wisdom of removing Whiting from the helm to leave relative newcomer CEO David Kassler in sole charge of the ship whilst facing one of the biggest challenges in Phones 4u’s history. Some industry players speculate the move indicates fundamental problems within the business.
Speaking to Mobile, Whiting gives a brisk dismissal to the view that these challenges, coupled with his stepping back from the business, will leave Phones 4u on the back foot. He also insists his move from group CEO to non-executive director is nothing more than part of a long-term succession plan and does not indicate deeper problems.
He says: ‘This is part of a tidying up exercise. I haven’t been running Phones 4u on a day to day basis for a long time,’ adding that he had been planning to take a back seat since before Mary Grant’s appointment as CEO in 2012, but put this back when Grant left last year due to personal reasons.
Whiting dismisses claims that Phones 4u is struggling in the face of increasing competition on the high street as operators plan to boost their retail footprint. ‘What competition?’ he questions, adding that EE ‘has reduced its store count’ and that Vodafone’s store openings, since announcing expansion plans last year, ‘amount to no more than single digits.’ He continues: ‘If you look at the number of operator stores in the UK it has fallen each year for some time.’
Whiting also scoffs at speculation Phones 4u is under threat from EE’s review into its retail relationships, which is due to conclude next month. He says that he has seen this all before.
‘I guess it is no different from 15 years ago in the business. We have partnerships with network operators and, yes, they have always had the option to review their relationships with their distribution partners but I bet if you asked Marc Allera [EE chief sales officer who is overseeing the review] what his strategy is, I am sure he will tell you Phones 4u is still very much a part of that going forward.’
Turning to the threat of rival Carphone’s merger with Dixons, Whiting is similarly dismissive, insisting that Phones 4u had faced similar predictions in 2006 when it was bought by Providence Equity Partners from the Caudwell Group.
He reminisces: ‘A lot of people said then that it wouldn’t last – that we had six months, that we were dead in the water and would go the same way as The Link [retail chain which closed in 2006].’ He adds: ‘The bottom line is that so long as we continue to create value for our partners and for ourselves and continue to offer customers a great experience we have a future.’ He continues: ‘If you look at where the business is today we have the best team in the industry and the most stable management team.’
However he insists that Phones 4u will not be resting on its laurels, warning that Phones 4u ‘must evolve and change’ to stay successful, and adding that Kassler, whose previous role was CEO of EMI Music, will bring ‘new thoughts and ideas to the business.’
He adds: ‘As well as being a very bright guy with lots of experience in a market that is equally changing very rapidly, David brings a fresh pair of eyes to the business.
‘He has free rein to ask ‘why do you do it that way?’ which is great for the business, challenging it in ways it has not been challenged before.’
Whiting also makes a plea for the mobile industry to take a more positive view of its future. Pointing to industries such as construction, where margins are significantly lower, he says: ‘Let’s put the mobile industry in perspective. Yes, the industry is competitive but that is healthy and drives Phones 4u to be an even better business - this industry still makes good money and mobiles are still the most important device to most people – sometimes we need to get our heads up and look at the bigger picture – there are not many industries more exciting than this one.’
"Business is only sustainable if you build excellent teams"
Asked what his major achievements have been at Phones 4u Whiting points to his ability to deliver shareholder value and build sustainable businesses.
He points to Singlepoint, Phones 4u’s customer billing service which was sold to Vodafone for £405m in 2008 and Lifestyle Services Group, which Phones 4u sold for £107m last year, as examples of successful businesses which were built up at Phones 4u under his stewardship.
He says: ‘At the end of the day the CEO of any business is paid to create long term shareholder value and that only comes by building a business that is sustainable and that business is only sustainable if you build excellent teams.’