1/23/2008 11:22:00 AM
Carphone looks to new CEOs at O2 and Orange to start spending
Carphone Warehouse will look to the two operators it has the strongest relationship with – O2 and Orange – to boost its profits for the year, after a disappointing set of third-quarter results.
Both operators begin 2008 with new CEOs; O2’s Ronan Dunne replaced former CEO Matthew Key, while Tom Alexander has stepped into the top job at Orange, replacing Bernard Ghillebaert.
O2 and Orange have been dominant networks at Carphone in the past, but have been quiet in the last year as they have moved to retaining customers through their direct channels.
One analyst said: ‘I expect Carphone will want to make the most of the eagerness of the new bosses at O2 and Orange, and try and get a big piece of both of their acquisition budgets.’
Many expect Carphone to build on revenue share and ongoing revenue models with both networks this year, as CEO Charles Dunstone (pictured) said Carphone is becoming less dependent on seasonal swings in trading for profits with a bigger emphasis on ongoing revenue.
He also suggested that operators’ own retail ambitions have peaked. ‘The people I talk to aren’t saying they’ve got expansion plans for more stores now that they’re in all the major shopping centres.’
Carphone’s profits and revenue during the run up to Christmas were below forecasts, with the company blaming the general gloom on the high street and flat prepay sales.
Mobile internet demand
Carphone said it has been overwhelmed with demand for USB modem dongles, and has been struggling to get stock for the devices which provide new business, but offer relatively small margins.