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Fonehouse “missing out on easy prepay footfall”

Paul Withers
October 12, 2010

Retailer Fonehouse to delay a drive on prepay for six months as it continues to bed down contract and business sales strategies

Fonehouse said its aggressive focus on contract sales has cost it prepay connections, but that it will delay a drive on prepay for another six months to bed down its contract business.

Fonehouse commercial director Daniel Schama, speaking in a T-Mobile session at Fonehouse’s recent partner conference in Hertfordshire, said: “We haven’t focused enough on prepay in the past. We’ve punched above our weight on contract but we probably don’t do our fair share on prepay.”

Schama urged partners to alert the purchasing team of any glaring holes in the company’s portfolio of prepay handsets.

Managing director Clive Bayley (pictured) said prepay has suffered as Fonehouse has focused on launch of its business sales division and expansion of its franchise programme.

He said: “We can make the package better, which we are working on. We need to sit down with the networks and create a deal that makes sense for everyone. At the moment it doesn’t quite make sense to put a big thrust behind it financially.

“Would we rather sell contracts or prepay? Contracts, because there is more money to be made. Are we missing out on the quick-purchase footfall? Yes we are. We are addressing it but we have so much on right now that it won’t be until Q2 next year that it is properly rectified.”

Bayley highlighted the need to tackle box breaking issues, to be sure of connections on sales.

He suggested Fonehouse has a good record on box breaking, but hinted the networks have put increased pressure on retailers and that, combined with its focus on contract sales, Fonehouse has stepped back for the time being to ensure it returns with a prepay initiative that positively discourages the practice.

Bayley said: “We have to rationalise it to offer a sensible package. There are box breaking issues, but we must be at the top of the list for not having suffered from this.

“Will our partners do it? Ninety per cent of them won’t. That’s why we’re not selling lots of prepay because they’re not box breaking. The model has to be right to make it viable for us all to get behind it.”

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