Evolve sets top spot target

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Despite doubling its Vodafone base to 40,000 and increasing its turnover by 300 per cent in 12 months, Evolve Telecom wants more. 

Evolve Telecom is Vodafone’s second-largest indirect partner and claims to have one of the lowest levels of churn – at five per cent – among the network’s 22 platinum partners.

The organisation has had a busy 12 months, which has seen its turnover grow more than 300 per cent, and its customer base more than double following the acquisition of B2B dealer CBS Communications (for an undisclosed fee) last July.

The purchase has given Evolve a dual strategy of growing both organically, as well as by further acquisition.

Evolve Telecom was formed by Mark Gordon (pictured) in October 2003. He was joined by co-director Paul Althasen four years later. Gordon and Althasen had worked together at franchise mobile retailer Mobile Phone Centre (MPC).

MPC’s business was running 15 shops serving both consumer and local business connections across London and the Home Counties, and at the height of its success it had a turnover of £8 million. The incursion by the networks into its own high street presence saw Althasen sell MPC to Vodafone in 1998, and Gordon began to focus solely on Vodafone B2B connections.

“The stores were hard work with the increasing competition,” says Gordon. “Mobile operators were opening a host of shops in many different places and we could see it wasn’t a long-term strategy for us. On the consumer side, we didn’t have the commercial propositions to compete on the high street with the networks. We needed to focus on B2B.”

Transition

A B2B department was formed, where Gordon focused his efforts on developing growth on that side of the market, while moving completely away from retail. He formed Evolve Telecom in 2003 and the business grew steadily, before Althasen took a 50 per cent share in the B2B dealer in 2007.

Following the sale of MPC to Vodafone, Althasen had gone on to be one of the co-founders of prepay mobile top-up business e-pay in 1999, of which he was chief executive and co-managing director. In February 2003, Althasen sold e-pay to Euronet Worldwide, a provider of electronic payment and transaction processing solutions for financial institutions, retailers, service providers and individual consumers. He currently serves as the company’s executive vice president.

Following Althasen’s arrival Evolve went through a transitional 18-month period that culminated in the purchase of rival CBS, in preparation for growth in its unified communications offerings. Gordon says all Evolve’s acquisitions, including that of CBS, are privately funded through shareholders.

“It was a good time to grow the business, leverage more value from our customers, and build a bigger and broader base of customers,” says Gordon. “We focused on growth and how we grow our customer numbers.

“If we can add value to our existing customers and they see it adding value to their businesses, then that strengthens our relationship with them. That also increases the revenue we’re going to achieve from those customers by taking multiple products from us.”

Retaining customers

Last month RIM’s former distribution and European sales operations manager Paul Richmond joined Evolve as its sales director. Richmond had spent almost three years at RIM and previously had a two-year stint at Hugh Symons, as a field sales manager. He is now tasked with strengthening the senior management team at Evolve and driving organic growth within the company.

Richmond says: “We need to identify what we can do better and ensure all the opportunities within the customer base are realised – making them more sticky and driving revenue growth for ourselves and Vodafone.

“It’s easy to find customers but potentially harder to retain them. Evolve has one of the lowest levels of churn among Vodafone’s platinum partners by putting our arms a bit further around customers.”

Evolve began targeting Cambridge-based CBS, as it was a top-five indirect partner with Vodafone. The acquisition doubled Evolve’s Vodafone customer base to more than 30,000 connections.
Gordon explains: “It was an opportunity to grow our base significantly. CBS was a good fit. The customer profile was similar to our own and the geographic territory added to what we already had.

“We agreed a deal in May. By July 2 it was complete. Combining two top-five Vodafone partners created the second-largest Vodafone indirect partner in the UK. It has elevated us to the next level in this industry. We’ve retained the local service element, beefed up the service and support and added two more people to the customer support team.”

There was a transitional period of nine months as both businesses knitted together and integrated CBS into Evolve’s model.

Gordon and Richmond say the transition is complete and Evolve’s customer base has grown to over 40,000 connections. The company is on the lookout for more medium-sized indirect partners similar to CBS, because according to Gordon, Evolve has shown it is more than capable of executing those types of deals.

Generating growth

Talks are already in place with two possible acquisitions. While acquiring another Vodafone indirect partner would make an ideal fit and integrate easier into Evolve’s business, Gordon admits to talking to businesses whose customers are connected to more than one network.

“It’s not just about the networks. We also look at the customer profile and see if the geographics fit what we’re doing.”

 

Full article in Mobile News issue 490 (June 6, 2011).

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