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Exclusive: £40m Vodafone repair and logistics deal up for grabs

Michael Garwood
July 6, 2015

Ingram Micro Mobility, Brightstar and holders UTL battle it out for lucrative contract

Vodafone has put its repair and logistics contract out to tender as it looks to slash its £40 million annual costs in half.

The operator issued the tender last month and is said to be holding discussions with a number of leading companies, including DHL, Ingram Micro Mobility (IMM), Brightstar and current holders UTL who have held the contract for more than a decade.

Vodafone is understood to receive around 3,000 faulty handsets a day, which are then collected and repaired at UTL’s 300,000 square foot site in Nuneaton before being re-dispatched.

“The mobile industry is fast paced, elements of contracts are always up for discussion and renewal and that’s the case with Vodafone,” said Frank Nigriello, director of corporate affairs at UTL’s parent company Unipart Group Ltd.

Vodafone has made it clear to all parties that costs for the service must fall. Sources close to the matter claim an initial offer from UTL valued at £30 million was rejected by Vodafone, resulting in the tender being issued to the wider market. UTL are said to have a 15 per cent mark up (around £6 million) on its current deal.

It’s also claimed Vodafone has received offers valuing the contract at between £15 and £20 million a year as part of the first round of discussion, although it’s not known from whom.

NDA agreement
UTL, who refused to confirm they were still in the running for the deal, has worked with Vodafone for over 15 years, managing numerous business categories, including car kit installation, accessories, repairs, logistics and call-centres.
The pair collaborated in 2006 as part of a joint investment, to build the site in Nuneaton.

A strict NDA agreement prevented those involved to discuss the deal, although UTL insisted none of its 380 staff working at its Nuneaton hub, would be at risk regardless of the Vodafone outcome.

UTL claims to repair more than 100,000 handsets every month through its numerous  mobile repair contracts which also include Virgin Mobile. It has accreditations to repair all major handset brands and various repair, recycle and logistical deals with partners such as Apple, Sky and Three.

IMM and Brightstar have already been tipped as early favourites to land the deal should Vodafone axe UTL.

IMM recently completed its acquisition of global repair firm Anovo for around £80 million. Its president of Europe Jac Currie said at the time of completion,  the deal would help to “open doors”. The tender process for IMM is also said to be managed by director of service Mark Howard who spent five-years at Vodafone as head of logistics (2009-2011) and head of supply chain and logistics (2011-2013).

Brightstar is also continuing its expansion of its buyback business, formerly Mobile Phone Exchange (MPX) which already manages Vodafone’s handset recycling programme, refurbishing more than 15 million devices a year.

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