Cutting Room: Distribution’s bright star

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Handset distributor Brightstar looks, from the outset, to be defying the recession. Certainly, if its airtime moves in the UK and its expansion into Germany come off, it would appear to be the case.

The obvious parallel is 20:20 in the UK, which has gone through a second cull and axed 60 jobs. We should put some perspective on this.

20:20 is a lumbering old beast of a distributor – or, at least, it has been under its private equity ownership, something its latest UK reorganisation looks to put right.

Because it was sold by former boss John Caudwell just as the market changed. The business he sold was set up for the old days of distribution in mobile. Now, as well as a UK overhaul, it is attempting to establish itself better in France and ramp up its formidable Swedish business to compete with its US peers on a global basis.

Brightstar has no such worries. It entered the UK with the clearest of intentions – to take 20:20’s mantle as UK number one. But it entered Europe through a partnership with IT distributor Tech Data – and the UK through Tech Data local subsidiary unit Computer 2000.

Its focus has been, then, officially to pitch to the convergence market, only now really taking a foothold.

Its country rival Brightpoint has, curiously, done much the same thing, although it hasn’t entered via any huge corporate juggernaut, but instead by a shrewd backdoor manoeuvre in taking specialist kit distributor Hugh Symons Telecom. At the same time, it has just announced broader global cuts, totalling 220 jobs.

Back to Brightstar’s latest. Its IT/smartphone airtime play is clever; the kind of thing Avenir is attempting via tie-ups with WestCoast and others in the UK. It looks especially good in light of its lost Nokia deals, which went to 20:20, Data Select and Brightpoint in the end.

BlackBerry maker RIM and Windows Mobile author Microsoft have signed it, however, which complements its SME/corporate objectives well, while it can pitch to the likes of Phones 4U, Tesco et al with its other handset deals. As Samsung gears up a proper business phone portfolio.

Its interesting too that Brightstar, if all airtime deals come off, would have scored a rare old coup – by having all the major UK network operators on its books. Avenir lost, or junked, T-Mobile. Only Redstone can claim a five-network hand.

Perhaps then, all the arguments about distribution necessarily aligning with particular network operators to secure sales do not hold, if a distributor takes a very niche approach. As Brightstar is doing with these contracts.

As this unfolds, where does it leave standard airtime distributors? If it works, it surely represents new consolidation and power in the sector.

 

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