Alcatel fights its corner


But William Paterson, UK and Ireland country manager for TCL Communication (the Chinese company which owns the Alcatel brand) begs to differ, saying Alcatel is going from strength to strength. “If things are so bad, why do our sales figures say otherwise?” he argues.

Paterson’s been in the mobile industry for almost two decades, working for Alcatel from 1998 to 2001, then manufacturer Sendo, before returning to Alcatel in 2005.

With the two sides seemingly poles apart, there was no point in Fone pulling any punches: if sales are so good, why is dealer feedback on Alcatel so awful? Comments ranged from “they should stay in the supermarkets where they belong,” and “the phones are rubbish and one in four break,” to “Alcatel products lag behind in looks and technology.”

The case for the defence

Paterson shrugs the whole thing off by first citing Alcatel’s impressive 2006 sales figures. “Last year we sold 550,000 handsets and this year we predict a 30 per cent increase, so we’re clearly doing well,” he says. In 2005 it sold 95,000 handsets, also a huge leap on the 2006 figure.

But Paterson understands the incongruity between these healthy figures and dealers’ lack of enthusiasm: “We do very well in the self-select sector (shops like Woolworths and Tesco, where customers take products off the shelves and take them to the till) and in networks’ direct stores. But we need to do more to raise our profile with dealers.”

Looking at accusations Alcatel is lagging behind, Paterson stresses the manufacturer makes
second tier handsets and is not out to compete against first tier products such as Nokia’s N95.

“Our strengths lie in entry level handsets and we’re not trying to be active in every part of the market,” he asserts.

A strategy is now in place to improve the brand’s standing with dealers. “We are increasing the feature set on our phones, which should get their interest,” Paterson says, adding Alcatel has recently released both its first camera and MP3 product (the OT-C701). But he explains that, in order to stick to what it does well, the company isn’t touching B2B and hasn’t got a 3G product.

Alcatel doesn’t do any contract phones, and while Paterson says it would love to break into this sector, it is stymied by the public’s desire to get the wellknown brands on contract.

Patterson predicts that if Fone was to carry out the same investigation into dealers’ views in a year’s time, we’d find favourable feedback on Alcatel. His respect for the market is obvious, as he says: “We will work to get them on board. The independents are important to us as they make up 20 per cent of the prepay market.”

It plans to do this by wooing dealers via the distribution channel. “We’ll use distributors such as 20:20 and Data Select and stress to dealers they will receive the right support and POS for our products,” he says.

However, the company’s own staff will be doing some of the work too. An Alcatel training team has already been visiting T-Mobile and Orange direct stores and Paterson says “they will soon be doing the same for the independents”. This approach seems be working – Alcatel’s OT-E230 is the top selling prepay handset in Orange stores.

While Alcatel successfully uses advertising to raise its profile, it is in conjunction with retailers such as Woolworths and Tescos in mediums such as tabloid newspapers and women’s magazines. “To be frank we don’t have the money to stage a national billboard campaign for a particular phone,” Paterson confides.

Form over features

Dealers gave Fone a lot of negative feedback on the look of Alcatel phones, but Paterson argues they are mistaken. He points to a lack of awareness of the handsets, claiming: “Our phones were so popular last year because of their feel, fi nish and design. We sell phones on looks, not feature set; they are good value as they seem more expensive than they are.”

The handsets are dreamt up by a department in China, but two French designers have been included in the team. “They ensure there is a European infl uence on the products; a lot of
phones that come out of China look like they’ve been made there,” Paterson says.

Looking to the future, Alcatel doesn’t intend to encroach on the territory of the big mobile manufacturers. “We’re not moving toward a tier one product, but will be sticking with entry level camera phones, and entry level multimedia phones,” Paterson adds.

He says that in coming years the Alcatel team will continue to innovate in designs, including its use of materials on the handsets. The company is also collaborating with a famous designer, as LG did with the Prada phone. “No more details are available yet, but the handset will be released through The Carphone Warehouse in November,” Paterson reveals.

So dealers were right to accuse manufacturers of imitating each other rather than coming up with new ideas? Paterson is quick to defend the fi rm on this point; Alcatel was already doing collaborations back in 2003, when it brought out ‘Elle’ phones linked to the eponymous fashion magazine.

He frequently comes back to Alcatel’s commitment to low cost phones – for example, Woolworths was recently offering the OT-E201 on Orange for £8. But a recent T-Mobile study found there are 52.3 million phones lying unused in UK homes – does Paterson feel selling mobiles so cheaply contributes to this depressing mobile mountain? “Offering phones at our kind of prices simply allows more people to have a good value handset,” he argues, adding that Alcatel supports T-Mobile’s scheme for customers to return unused handsets for recycling.

Force in numbers

One factor contributing to the number of abandoned phones is the fact manufacturers bring
out so many handsets in a short space of time, causing people to feel they constantly need something new. “Manufacturers have to bring out phones regularly as people like to upgrade their mobiles every six months and we have to keep up with them,” Paterson says. He also believes shoppers expect technology to change rapidly, so they welcome the heady pace of new releases.

And he wouldn’t like the industry any other way, as he loves the way it is “constantly evolving”. For him, the fact new products frequently emerge is a result of Alcatel’s designers being “wildly creative”.

Paterson’s enthusiasm for both his work and his company speaks volumes: “Not a day has gone by when something hasn’t astounded and amazed me,” he says.

It remains to be seen if he can transfer this enthusiasm to the dealer community.