What’s the burning issue in the mobile industry at the moment?
MARK POLLAK: I find it quite interesting that you now have very low-cost handsets available at around £20. I think the issue with that is that I’m not sure that’s the right price for them and whether the networks are just trying to destroy the competition and then put the prices up at a later stage.
The question is are these actually being subsidised? I can’t see how you can make a handset with a colour screen for £20, because I buy parts from Samsung and sell LCDs and each one of them is costing me £20. In Argos you can get a brand new W200 for £20. The real cost might be £50. The retailers lose that on the sale of the handset in the short term to kill independent competition and then raise the prices at a later stage.
JORDAN HUIWE: On the cheaper prepay offers I definitely agree with you there. But with more expensive handsets, I find that we can match or do a bit better than what they’re doing.
How big an issue is box-breaking in the retail sector?
POLLAK: Box-breaking is becoming bigger all the time.
HUIWE: Carphone Warehouse’s phones are SIM-free so you buy a prepay handset without the card anyway.
POLLAK: You can’t fault Carphone for that because it’s your right to get a SIM-free phone.
AMIRUL CHOUDHURY: Some dealers have become very greedy. As soon as we see an opportunity to make £20,000 quickly we go for it, and it’s
the wrong attitude. If someone walked into my store and said they wanted an N95 on Flext 75, I would be very wary, because he just wants the phone and won’t be paying the bills.
POLLAK: Many people have caused the damage by box-breaking. Networks will see that there is box-breaking going on, but the majority still sweat it out to justify the routes that they’re following to acquire customers. Why do networks subsidise the handset so much and make box-breaking a very
attractive thing to do? At least the thing about Carphone Warehouse is you can’t go there and buy 20 phones any more; you can’t use the same credit card twice.
HUIWE: When I worked for Carphone a few years ago you could easily walk in and buy two phones with the same card. It used to happen on a regular basis.
How can you keep selling mobiles in the current climate?
CHOUDHURY: My business is geared up towards ethnic minorities and soon the visas are coming out for working Bangladeshis, so I’m expecting 20,000 applications to go through. I only have one store at the moment, but that single outlet is better than 20. They can’t speak English and because I am Bangladeshi, that is my niche market.
POLLAK: On Brick Lane, the community is very small and everyone knows each other. People will come off the plane and go to Brick Lane to Amirul, because he understands the language and knows what they want. My question is you’ve got 20,000 immigrants coming into the UK, they haven’t got a job and they can’t speak English – so how are they going to get a contract? You won’t be able to do a credit check.
CHOUDHURY:We are focusing on prepay business at the moment – that’s an area where I can gain most success.
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