Carphone connections fall
24 January 2012 09:44
Carphone Warehouse has said that connections fell by over 16% at the end of 2011 after a slump in demand for pre-pay mobile phones.
The retailer, which has 2,400 outlets across Europe, estimated the pre-pay market as a whole fell by as much as 40% in the UK during the quarter to the end of last year, which it said reflected a reduction in subsidies from the networks and a lack of smartphones in the sector.
As a result, like-for-like revenues for its core retail business were down 4.7% year-on-year in the quarter, driven by the 16.6% fall in total connections, although Carphone was encouraged by post-pay sales as customers coming to the end of longer 24 month contracts renewed with newer versions of smartphones such as Apple's iPhone 4S and Research In Motion's BlackBerry.
It also reported 15% growth in non-mobile phone revenues, including tablet devices, accessories, applications and content.
This still represents less than 10% of total revenues but Carphone is rolling out more Wireless World outlets to tap into demand, with the aim of having 375 of these stores across Europe by the end of March.
Carphone recently closed the 11 "big box" shops it opened in conjunction with US group Best Buy in May 2008 in an effort to take on rivals such as Dixons Retail. With losses of £46.7 million in the six months to September, the £1.1 billion joint venture was forced to admit that its attempt to blend competitive prices and American-style customer service had failed to pull in UK shoppers.
It said today it was able to offer "credible alternative roles" to almost everyone who wanted to remain within the business.
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