Chessington-based Frequency Telecom, the original handset and accessories distribution business set up in 2002, has struck exclusives lately with two accessories brands, both makers of cases for mobile phones.
Accessories distribution is fast becoming Frequency Telecom’s core business. In terms of sales growth, it is outstripping its sales of handsets.
“Our business has changed dramatically over the last 18 months to reflect the changes in the market. Whilst we are still a very good handset distributor our largest revenue generator is now likely to be from accessories,” explains Frequency Telecom marketing director Stephen Donovan.
requency Telecom’s trio of sales businesses – B2B sales unit Jelly Communications and SIM-free handset web retailer CleverKit, as well as handset and accessories distribution – work as separate divisions, with their own objectives and strategies, but run out from a central finance, marketing and warehousing resource.
The group turned over £18 million last year, with Jelly Communications putting in £1.4 million of that sum and CleverKit a minor start-up contribution. It handled 85 per cent more products in 2009 than in 2008, largely by virtue of its focus on accessories, with slimmer income and better margins attached.
It reckons it can raise the figure by 20 per cent this financial year, and will shortly look for new offices and warehousing to house its expanding business.
Donovan explains: “The key objective is to deliver income that we can invest back into the business and allow our people to continue to take advantage of the opportunities provided in this dynamic market.”
To a degree, handset distribution is a tougher nut to crack; it is a market dominated almost totally by the likes of 20:20 Mobile, Data Select, Brightstar and Brightpoint.
End users are less inclined to experiment in brand terms with big ticket items like mobile phones. There are a handful of major handset distribution contracts up for grabs, and there are few places they will ultimately go. Margins also are slim, and make it harder still for new entrants without sufficient scale to break ground.
That said, Frequency Telecom has been working in the market for eight years, and does a job indirectly for major manufacturer brands in UK sales channels – via accredited UK partners in the first instance (HTC from Brightpoint, Nokia, Samsung and LG from various others).
And it also has a choice UK contract with Research in Motion (RIM) for re-sale of BlackBerry handsets and accessories.
Even so, accessories distribution is an easier market in which to carve a niche. Processes are complementary of course, and major handset distributors invariably play in the sector also. And so 20:20 Mobile is king.
But accessories allow retailers points of differentiation because, by definition, end users like to accessorise, and will purchase headsets, carkits, phones cases, chargers and suchlike, either out of necessity or on whims.
Distribution companies with good procurement skills and broad knowledge of niche brands, as well as efficient distribution engines, can offer retail channels something different, which allows them in turn a rare way to appear so.
And so, Frequency Telecom is excited by its new and exclusive contracts with mobile phone case brands Case-mate and Otterbox.
“These contracts are big news for us and, most importantly, will change the way we are perceived in the market,” says Donovan.
“In the past we’ve been seen as a smaller distributor. But with deals like this, large high street retailers are now talking with us and that says a lot for what Frequency Telecom has achieved recently. People will hopefully see that there is a lot more to us than SIM-free handsets.”
US brand Case-mate specialises in protective cases for smartphones, and is stocked already by AT&T and Walmart in the US. Frequency Telecom has a European exclusive on distribution of the Case-mate range, as it does with its new European master agreement for Otterbox, manufacturer of a range of rugged mobile phone cases.
It is now selling Otterbox products to retailers in the UK, France, Germany, Spain, Italy and Scandinavia, and plans to cover most European territories by the end of the year. It is taking on native speakers at its Chessington headquarters to cover retail accounts in all destination markets.
This is the start for Frequency Telecom. It claims to be in negotiation with other accessories manufacturers of similar profile also.
Frequency managing director Gareth Limpenny (pictured) adds: “Case-mate is a very strong brand and our sales of its products have already been significant. It’s quite a diverse range that meets the demands of a far more fashionable consumer, who is now prepared to spend a lot of money on a smartphone product and wants to keep it protected. There’s something for everyone and there are many more exciting products in development.”
Full article in Mobile News issue 460 (March 29, 2010).
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