The Cutting Room


Surely next year can’t get any tougher for the independent dealer can it? Probably not but it is likely to remain tough but possibly slightly less of a struggle.

The wrongdoings of cashback have dealt a serious blow to the independent channel – customer confidence in their local mobile dealer is at an all time low and who can blame them? No doubt direct dealing from the networks will continue to be prominent, despite their insistence that the indirect channel remains of paramount importance to them. But all will not be lost for dealers.

Indications towards the end of this year have shown that regulatory bodies like Ofcom are showing a key interest in firmly clamping down on cashback. The meeting between it and dealers next month to discuss this will be a key turning point.

We will see more dealers try to form closer alliances with one or two networks in an attempt to stay afloat in the consumer market and they will finally pull together in a collective effort to combat these problems.

Dealers branching into B2B will be a more prominent feature next year. O2, Vodafone and Orange’s offerings will become stronger and with 3 entering the arena in Q1, there will be a lot more to offer. After the struggles of the consumer market this year, dealers will know it’s time to offer more.

The BlackBerry range will continue to expand and with HTC being successful in establishing itself as a major player in B2B handsets this year, the portfolio as a whole will explode, along with data speeds which will reach double figures very early on.

Bet on Nokia

Handset capabilities have exploded in 2007 and will continue to move forward next year, shown by the rise of 5-megapixel cameras, Wi-Fi and music capabilities. Mobile entertainment as a whole has taken off with the launches of MusicStation and the Nokia Music Store, and there will be more vendor/network partnerships to ensure they aren’t left behind.

Nokia will continue to head the UK handset market and the 8GB N95 will be a big seller into the early part of 2008. But Samsung and Sony Ericsson will continue to develop their portfolios and could close the gap.

Rumours have been rife that sales for the Apple iPhone have been slumping of late but we will see a small improvement here when it is released to the indirect channel in Q1. However, it won’t be until the rumoured 3G-version is released that we will see a real significant impact.

It is also likely that Vodafone will once again team up with The Carphone Warehouse to revive new connections. This will follow the recent re-alliance of Phones 4U and O2 because both will not be able to stand the thought of losing each others’ business.

Congestion charge

The distribution channel has become congested and even tougher and we could see some fall by the wayside.

It will be all about consolidation here and because dealers will branch more into B2B, there will be a bigger shift from consumer to business and distributors will ensure that they offer dealers more, such as broadband and fixed-line.

Smaller distributors will continue to experience a tough year and will have to find a niche in order to survive, but we will see a rise in the number of distributor/MVNO’s partnership as the market will threaten to explode.