Carphone Warehouse

The Carphone Warehouse Ltd. is a mobile phone retailer based in London, United Kingdom. It trades as Carphone Warehouse in the United Kingdom and Ireland, and as Phone House elsewhere. The company has been a subsidiary of Dixons Carphone since 7 August 2014, which was formed by the merger of its former parent Carphone Warehouse Group with Dixons Retail.

The Carphone Warehouse Ltd.
ISINGB0008787029 
Founded1989 (1989)
FounderCharles Dunstone and Julian Brownlie
HeadquartersNorth Acton, London, United Kingdom
Revenue£10.7 million (2013)[1]
£57.1 million (2013)[1]
£4.2 million (2013)[1]
Number of employees
over 11,500[2]
ParentDixons Carphone
Websitewww.carphonewarehouse.com

Prior to this merger, Carphone Warehouse Group was listed on the London Stock Exchange, and was a constituent of the FTSE 250 Index.

History

Foundation

The company was co-founded in 1989 – when most portable phones were too bulky to carry and were known as car phones – by current Chairman Sir Charles Dunstone and Julian Brownlie, who put £6,000 into the company from their savings. In 1990, Dunstone brought in his school friend David Ross, a chartered accountant.[3]

While Dunstone became the public face of the Carphone Warehouse, Ross (described by Dunstone as his "secret weapon"),[4] developed and drove the high street retail footprint of the company by buying Tandy in the United Kingdom for £9 million in January 1999.[5]

Third partner

Dunstone approached former customer Guy Johnson of NEC UK – later described by one City analyst as "the Ringo Starr of Carphone Warehouse" for being in the right place at the right time[6] – to become the third partner, later taking up the role of Logistics and Distribution director.[7] Ross led the footprint development of the company, under The Phone House brand, across Europe and the United States.[8]

Flotation
Former Carphone Warehouse Group plc logo in use until merger of 2014 with Dixons Retail plc

When the IPO of Carphone Warehouse took place in July 2000, Dunstone owned half, Ross a third, and Johnson most of the rest.[9]

Charles Dunstone takes control

Johnson sold the majority of his stake in July 2001, and retired with his young family to his holiday home in Portugal.[7] Carphone Warehouse bought Opal Telecom in November 2002.[10]

Ross had been joint Chief Operating Officer with Dunstone from 1990. Whereas Dunstone stayed with the business that he still runs today, Ross started to give up his executive position from 2003.[9] Ross became deputy chairman in July 2005,[11] and by 2008, was a non executive director. Ross resigned from the board in December 2008, over an issue with shares.[12]

AOL UK Internet access business acquisition
Main article: AOL Broadband

The Carphone Warehouse announced that it would purchase the Internet access business from AOL in the United Kingdom on 10 October 2006 for £370m,[13][14] making it the third-largest broadband provider, with over two million customers, and the largest LLU operator with more than 150,000 LLU customers.[15][16]

Best Buy

In October 2006, it was announced that Geek Squad would be launching in the United Kingdom, in an 50/50 joint venture between Carphone Warehouse and Best Buy.[17]

In May 2008, Best Buy agreed to buy a 50% share of The Carphone Warehouse retail business for £1.1 billion, to launch the Best Buy Europe joint venture.[18] The division was renamed CPW Europe, and included all stores operating under the brands Carphone Warehouse and Phone House.[19] Best Buy and Carphone Warehouse would also open joint venture stores in the United States.[20]

Demergers

On 8 May 2009, Carphone Warehouse became Britain's second largest broadband provider (after BT) when it agreed to pay £236m in cash for the United Kingdom assets of Tiscali, the Italian telecoms group. At the time, Charles Dunstone confirmed that Tiscali UK would become part of TalkTalk, which would be demerged as a separate company.[21]

The group split in March 2010, with TalkTalk and New Carphone Warehouse each becoming publicly listed companies, both with Dunstone as Chairman. Dido Harding became CEO of TalkTalk, and Roger Taylor CEO of New Carphone Warehouse.[22] On 30 April 2013, Carphone Warehouse agreed to a divorce from Best Buy and to purchase the company's 50% stake in Best Buy Europe for £500 million.[23]

Carphone Warehouse owned 46% of Virgin Mobile France in a joint venture with Virgin Group. In June 2014, Carphone and Virgin agreed to sell Virgin Mobile France to Numericable for €325 million.[24] French competition regulators, ARCEP, approved the deal in November 2014.[25][26]

Carphone Warehouse Support Centre in Acton, London (2006)

Merger with Dixons Retail

In May 2014, Carphone Warehouse Group and Dixons Retail announced their merger to create Dixons Carphone. The merger completed on 7 August 2014.[27] The Dixons Group staff moved into 1 Portal Way, the original home of Carphone Warehouse, in North London in May 2015.[28]

iD network
See also: iD Mobile

In May 2015, Carphone Warehouse launched a mobile network, iD, a mobile virtual network operator using Three's network.[29][30]

Store closures

In March 2020, the company announced that they would be closing all 531 standalone UK stores the following month, resulting in 2,900 redundancies, with 40% of that number (1,160) potential redeployments. It was said that this measure was to be taken as a result of the changing mobile market.[31]

O2 cessation

In April 2020, products and services from the O2 network ceased to be available from Carphone Warehouse. After contract negotiations for a year, neither party could come to a mutually desirable outcome.[32]

Marketing and sponsorship

The X Factor

On 19 June 2007, the Carphone Warehouse became the official sponsor of the fourth series of The X Factor. The sponsorship deal was to last for three years. The Carphone Warehouse also became the sponsor of its spin off show, The Xtra Factor. After the Carphone Warehouse and TalkTalk split, TalkTalk took over the sole sponsorship of The X Factor.[33]

Big Brother

The company were the sponsors for the United Kingdom's version of Big Brother from 2004 to 2007. In 2006, they also sponsored Celebrity Big Brother and related Celebrity Big Brother shows on Channel 4.[34]

On 17 January 2007, in response to alleged racism in Celebrity Big Brother, Charles Dunstone said: "We are talking to Channel 4. The sponsorship is constantly under review. Clearly we are against racism. Most people understand that the person who has their name associated with the programme does not necessarily condone the content."[35][36]

On 18 January 2007, Carphone Warehouse announced that it had suspended its sponsorship of the show as Channel 4 had not taken sufficient action in response to the alleged racism in the show.[34] On 8 March 2007, the company permanently dropped its sponsorship of the show.[37]

Appys Awards

In April 2011, Carphone Warehouse sponsored the Appy Awards, calling them "the United Kingdom’s first major app awards ceremony designed to recognise innovation and development in app technology".[38]

Charity support

In October 2001, Carphone Warehouse established a corporate partnership with Get Connected UK, a confidential helpline service for young people, that continues today. Carphone Warehouse supplies Get Connected with office and helpline equipment and has been instrumental in ensuring it is free to call from all landlines and mobiles.[39] This partnership won the Charity Times Corporate Partnership Award in 2003 and the Third Sector Excellence Award for Corporate Partnership in 2006.[40]

Controversies

Data protection

During April 2005, TalkTalk's proactive sales techniques drew criticism in the press when it was accused of practising "slamming" to win new customers.[41] Customers who bought mobile phones from Carphone Warehouse retail outlets alleged that their landline accounts were subsequently switched without their consent.[42]

On 15 August 2006, the Information Commissioner's Office issued Preliminary Enforcement Notices for breaches of PECR (The Privacy and Electronic Communications Regulations) against Carphone Warehouse and TalkTalk for making marketing calls to people who are signed up to the Telephone Preference Service (TPS) or people who have asked that the company make no further calls to them.[43][44]

On 28 October 2006, in an interview in The Times, Richard Thomas, Britain's Information Commissioner, stated:[45]

We're taking action against some of the telecom companies, Talk Talk and Carphone Warehouse. We're taking action against them because we've had a lot of complaints that they've been telephoning people with marketing calls, people whose name is on the telephone preference service. And then we do these prosecutions, particularly with private detectives. We've got a big case coming up.

On 5 August 2015, hackers gained access to customer data for 2.4 million people who had used sites operated by Carphone Warehouse, including OneStopPhoneShop.com, e2save.com, Mobiles.co.uk and TalkTalk Group.[46]

In January 2018, the company was fined £400,000 by the ICO for "multiple inadequacies" in Carphone's security processes, including using old software and failing to carry out routine security testing. Intruders were able to access personal information, including the names, addresses, phone numbers, dates of birth, marital status and, in more than 18,000 cases, historical payment card details of customers of the Carphone Warehouse.[47]

gollark: I mean, every other metabolic process runs at 37 degrees C fine.
gollark: I'm sure some other animals make it work.
gollark: It should simply be better designed.
gollark: Well, "decisions".
gollark: The human body is simultaneously thousands of engineering miracles and blatantly insane design decisions.

See also
  • Local loop unbundling

References
  1. Annual Report 2013 Archived 12 October 2013 at the Wayback Machine
  2. "Annual Report 2014" (PDF). Carphone Warehouse Group. Archived from the original (PDF) on 10 August 2014. Retrieved 7 August 2014.
  3. "David Ross appointed to board of the National Portrait Gallery". 10 Downing Street. 17 February 2006. Archived from the original on 6 October 2007. Retrieved 2 November 2006.
  4. Wray, Richard (8 December 2008). "Profile: David Ross". The Guardian. London. Retrieved 8 December 2008.
  5. "Carphone Warehouse Snaps Up Tandy's Old UK Stores 01/26/99". Newsbytes PM. 26 January 1999. Retrieved 5 November 2006.
  6. Wray, Richard (13 July 2001). "Founder exits 'back seat' at Carphone Warehouse". The Guardian. London. Retrieved 14 December 2008.
  7. Cope, Nigel (13 July 2001). "Carphone Warehouse founder quits while he's (£140m) ahead". The Independent. London. Retrieved 14 December 2008.
  8. Ramnarayan, Abhinav (8 December 2008). "Profile: David Ross". The Guardian. London. Retrieved 8 December 2008.
  9. Sabbagh, Dan (9 December 2008). "David Ross: glitz and glamour of the upper-class 'barrow boy' with all the right connections". The Times. London. Retrieved 9 December 2008.
  10. "Carphone Warehouse buys Opal". This is money. 6 November 2002. Retrieved 25 August 2017.
  11. Wilson, Amy (8 December 2008). "Carphone Warehouse co-founder David Ross quits after disclosure failure". The Daily Telegraph. London. Retrieved 8 December 2008.
  12. Boyle, Catherine (8 December 2008). "Carphone Warehouse chief resigns over share disclosure". The Times. London. Retrieved 9 December 2008.
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  14. "Carphone Warehouse buying AOL UK". BBC News. 11 October 2006. Retrieved 11 October 2006.
  15. "State of the nation – Local Loop Unbundling". thinkbroadband.com. 26 October 2006. Retrieved 28 October 2006.
  16. The exact figure for LLU customers is not in the public domain, hence 150,000 is the estimated minimum. "Carphone Warehouse with 421,000 live broadband users". thinkbroadband.com. 26 October 2006. Retrieved 31 October 2006.
  17. Durman, P. "Geek Squad comes to Britain", The Sunday Times. Retrieved on 4 April 2007.
  18. "Carphone in £1.1bn US partnership". BBC News. 8 May 2008. Retrieved 29 March 2010.
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  20. Khan, Fahad (7 April 2008). "UK's Carphone Warehouse to Open 1000 Stores in US with Best Buy". PhoneNews.com. Retrieved 13 February 2020.
  21. Call-up for Talk Talk Archived copy The Sunday Times. 10 January 2010
  22. Carphone puts demerger details on the table Sean Buckley. Fierce Telecom. 1 February 2010
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