Phonebox is boxing clever

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Solihull-based B2B specialist Phonebox started the year with a bang. In early January it completed the purchase of rival firm Wire Communications, based in Warrington, in a cash and equity share deal.

The move signals Phonebox managing director Nigel Harrison’s strategy for the year ahead: expand the business through acquisition. Harrison (pictured) hopes the Wire purchase will spark a flurry of dealer buy-outs to boost the Phonebox customer base and give the Phonebox brand a national presence.

In an unassuming office block outside Birmingham, Harrison folds his hands behind his head. He is extremely laid back, but very bullish about Phonebox’s newest phases. He says dealers are struggling more than ever before. Phonebox can help by incorporating them into its expanding B2B chain.

“Smaller dealers are finding business increasingly difficult,” he explains. “We’re not big headed, but we’ve been in the industry 15 years and have a bigger infrastructure and higher footfall than most others. Dealers without this kind of scale are going to find it tough out there.

“Network operators have dropped many dealerships and among that group are some very well qualified people that could bring significant value to this business. Therefore we’ve taken the decision to push forward with an acquisition strategy.”

Harrison’s interest in acquisitions was actually piqued after an enquiry for his own business in the second half of last year. He says he never contemplated a sale, but the enquiry got him thinking.

“People were interested in buying Phonebox from me, with the intention of taking it to levels I’d not reach and sell it in five years for a significant profit. I thought, ‘If they think they can do that, I’ll give it a go myself’.”

Phonebox has around 25,000 connections on its books, split between 3,125 business accounts, and a further 6,300 consumer customers – on Orange, Vodafone, T-Mobile and 3. The purchase of Wire, founded only 12 months before, brought it another 400 lines.

Harrison is looking at similar opportunities, offering strugglers a way out or a helping hand. Acquisition is one avenue open to interested parties, and Harrison reveals two companies are currently in talks with Phonebox about Wire-style deals. Harrison has also just organised a franchise programme, which is still to take on its first dealership.

Full article in Mobile News issue 434 (March 9, 2009).

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