12/4/2008 9:52:00 AM
Fonehouse and Vodafone poised for new deal
Vodafone is close to finalising a deal with Fonehouse to bring its consumer contracts into the retailer’s growing franchise business.
The deal is understood to be weeks away, with insiders claiming Vodafone contracts will start being sold this month in Fonehouse stores.
Fonehouse is virtually still a T-Mobile solus dealer, and has been in discussions with both Vodafone and Orange to add a strong second network to its business in recent months. Vodafone has had a painful year, with the UK arm falling adrift of O2, which is now leading in the UK in terms of customer numbers, revenue and profits.
Vodafone is now looking to give its consumer business a jolt by extending its distribution. The company is also understood to have had preliminary discussions with Carphone Warehouse earlier this year to return Vodafone to the retailer, after it pulled out in October 2006 and used Phones 4u exclusively for consumer contract connections.
One source close to Vodafone said: We’ve got some great products at the moment, and we are looking at increasing our presence with quality retailers if there is a good fit.
Fonehouse chief Clive Bayley is understood to have made a commitment to T-Mobile that the addition of a second network will not cannibalise on its T-Mobile connections and upgrades.
Bayley would not comment on the Vodafone deal, but said: ‘We’re not in the business of churning. We’re growing our retail business at a rate where there will be a considerable increase in the volume of quality connections we do. The addition of a second network will strengthen our credibility on the high street.’
Fonehouse has 16 franchise partners, and will add two more this month. The company expects to sign up three franchisees per month next year, and is eyeing between 50 and 60 new franchise partners, taking its total high street presence close to 90, including 10 privately-owned stores.
Typical contract sales levels for each store are understood to vary between 80 and 120 connections per month, with two of the largest franchisees reaching 200 connections.