Distributor in talks with all operators in a move it says will increase its relevance with them and vendors
Tech Data Mobile is in “advanced discussions” with several UK operators over a deal which would see the operators receive handsets via distribution as well as directly from the manufacturers.
The news was confirmed to Mobile News by the distributor’s recently-appointed MD, Matt Child who claimed the move, the first of its kind, would help reduce the financial risks imposed on operators by eliminating the need for bulk orders and the ability to return unsold handsets without penalty.
Child, formerly director of trading at the now defunct Phones 4u, said one unnamed operator had already been signed up and he was hopeful that others would soon follow.
Increased market share
Tech Data Mobile has handset agreements with Motorola, Apple, Samsung, Huawei, HTC, Sony, BlackBerry, Microsoft and Alcatel Onetouch. Child said the move will help manufacturers, particularly those competing in the lower tier, increase their own market share, as operators will likely increase their product portfolio.
“At the moment, we’re having active discussions with UK operators,” said Child. “It will allows us to increase our relevance with the vendors and the operators.
“It makes a lot of sense and everyone gets a win out of it. Why would an operator tie all its cash up in phones when someone else can do that for them? It’s a good, long-term future for distribution. As far as I’m aware, no other distributor is offering this kind of service, and I think it is natural that the operators are talking to us about aggregating products from smaller vendors and in new categories, such as the Internet of Things and wearables. We can help reduce the risk.”
The moves is part of Tech Data’s efforts to become more “relevant” to the UK mobile market (B2B, retail, operators).
The distributor has received a level of criticism from former staff, claiming the mobile business had been in decline since it acquired Brightstar’s 50 per cent ownership interest in Brightstar Europe for $165.5m (£106m) in 2012.
Child admitted TDM had lost sight of the importance of the mobile channel in recent times and has reacted too slowly to market changes, but insists efforts to change that have now been executed and is already benefiting from the results.
He explained Tech Data is now integrating and utilising specialists from its IT business (formerly C2000) with its mobile team for the first time to boost its appeal in B2B, describing its “fundamental need” in today’s market. He added the firm had seen “significant” sales of Samsung products (see page 16) as well as iPhone’s having partnered with Apple in August.
“There has been a bit of a realisation within Tech Data at the highest level of how important mobile is,” said Child.
“The key word for us is relevant. We need to become relevant to the vendors, relevant to the customers and relevant to the dealer channel. A business the size of Tech Data doesn’t always get things right every time. I’ve been in mobile a long time and the understanding I’ve developed will help the business crystallise its ideas a little bit quicker and understand where it needs to be focusing a bit quicker.”