Carphone Warehouse

Carphone Warehouse

Carphone Warehouse was launched in 1989 and joined the FTSE 100 group of companies in September 2007. In the UK and the Republic of Ireland the company trades under the Carphone Warehouse name and elsewhere they trade as The Phone House.

The company, based in the UK has grown to become Europe’s largest independent mobile phone retailer. They currently have nearly 2,000 stores across Europe and expect to roll-out another 250 new stores across the group over the next year.

Distribution division of Carphone Warehouse

The Distribution division incorporates their retail and online operations. The group sells mobile phones and network connections through a variety stores spread across 10 European countries. They also sell a wide range of accessories and fixed line telephony products.

Network connections account for the majority of Carphone Warehouse’s retail revenues. These are split into two main categories: subscription (or contract) connections and pre-pay connections.

• Contract. Contracts or subscriptions are usually a contract of at least twelve months with a chosen network. Under the contract a customer pays a fixed monthly fee to the network, for which he or she receives a certain amount of free calls and text messages. In return customers can buy a mobile phone at a cheaper price, usually significantly below cost, because the networks offer a subsidy on subscription connections.
  
  
• Pre-pay. No contract is necessary with a network but top ups or credit is purchased for the mobile phone. The pre-pay connection attracts a much lower network subsidy because pre-pay customers are typically lower-spending and less loyal.

History of The Carphone Warehouse

The company was founded by David Ross and Charles Dunstone, the current CEO, in 1989 as a UK mobile phone retailer. By 1996 it was opening its first stores outside the UK in Paris and Dublin under The Phone House brand.

The next few years sparked the start of many big acquisitions that would drastically improve their presence in the telecoms market. In 1988 the Carphone warehouse began to acquire other phone retailers such as GEAB Teleshop in Sweden and Comprotoel Group in Holland. The acquisition of the UK business Tandy transformed the scale of the business with 268 stores spread across the UK.

In November 2002 the Carphone Warehouse acquired Opal Telecom PLC, an alternative network operator providing fixed line solutions to the business market. Then in February 2003 TalkTalk was launched to compete with the residential fixed line telecoms service. This led to further expansion of the fixed line services market when the group acquired to more of their competitors, Onetel and Tele2 UK. The group’s share of the UK residential market rose to 10%.

Further expansion has come in the broadband market as the company became the first to launch free broadband in the UK. With the acquisition of AOL’s internet access business in the UK, they have become the third largest broadband provider in the UK.