Carphone Warehouse 2002 Annual Report Download - page 3

Hans Roger Snook, Chairman
Chairman’s statement
The Carphone Warehouse Group PLC Annual Report 2002 1
Those who know me know that I have a passion for the Wirefree Future.
That is a term that Orange trade marked when it was fighting to
establish itself in a highly competitive market and guided its strategy by
a vision of what mobile phones could be.
It’s a vision I believe is largely shared by all network operators. It is
the recognition that practically everyone would own a mobile phone;
that mobile would progressively displace fixed line telephony; that it
would move well beyond voice. The Wirefree Future sees your phone as
your central access device, not just to all the people you wish to speak
to – whenever you want, wherever you are – but to all the information,
goods and services you want – whenever you want, wherever you are.
This and more is what I’ve always seen in mobile, and I still do. A
good deal of this has already happened. Mobile ownership is now
commonplace. Usage is increasing. Fixed line telephony is being
displaced. And today, we’re on the verge of seeing the mass availability
of new generation handsets coming together with new content and new
services, to take advantage of the greatly expanded capacity and
capabilities that 2.5G and 3G technologies will enable.
Look at the gloom and despondency that seems to characterise the
telecoms investment markets and commentators today, and you could be
forgiven for saying I’m dreaming. It wouldn’t be the first time people had
suggested that. But I’ll stick to my convictions. To me, it’s common
sense, and so many of the foundations of the Wirefree Future are now in
place, I believe it is inevitable.
It won’t happen overnight; but it will happen. I’ve referred to two key
conditions – the mass availability of new generation handsets and of
content and services customers want. These will build up progressively,
probably from the end of this year onwards. But there’s a third factor –
customer trust and familiarity. And that’s where The Carphone
Warehouse comes in.
Whilst the mobile market has very visibly grown, The Carphone
Warehouse Group PLC has also grown – much more quietly – to be the
leading independent retailer of mobile phones in the UK and Europe.
Much more important, The Carphone Warehouse has built its business
on constant adherence to providing a better mobile life; to being the
customer’s ally to ensure best value, best quality service and best
guidance to the mobile package that most suits each individual’s needs.
As a result, it has built a great brand. It is trusted by the customer,
and customer loyalty is high. Over 75% of people buying in The
Carphone Warehouse in the UK today are repeat customers – sometimes
for the sixth time or more. Our sales mix has always been tilted towards
subscription phones, which for most people offer best value.
All this has stood the Group in good stead. It understood that the
days of rapid growth of new mobile customers would inevitably give way
to a market increasingly dominated by replacement phone sales. It has
therefore migrated its business and its business model.
Today, The Carphone Warehouse is not just a retailer. Over 40% of
the contribution we are presenting to you in this Annual Report comes
from services that provide the Group with continuing revenue streams.
We have moved beyond the point of sale alone to providing
continuing service over the lifetime of our customers’ mobile phone
ownership. Our retail sales feed our service business, and our service
business reinforces customer loyalty as well as expanding and improving
the quality of our earnings. We shall build upon this platform.
A huge proportion of today’s mobile phone owners have only had
their phones for a relatively short time. Their usage will grow and,
beyond knowing that they make the right choice of phone, network and
tariff, they’re interested in the services they hear and read about. They
want to know what more their phone could do for them. They want to
separate hype and fact.
The Carphone Warehouse is the customer’s physical point of contact.
It’s also their virtual point of contact if they wish to deal by phone or
internet. We understand the technology and the road map of the
Wirefree Future. We have no intention of talking technology to
customers. We want to explain and demonstrate the services to let
customers see what would be of most value to them.
In this, since the formation of The Carphone Warehouse, we are the
ally of the network operator as well as the customer. We are a major
source of quality customers for the network operators, and we represent
an additional channel to increase customer familiarity and usage of
mobile services – always on the basis of best advice and widest choice.
"For a better mobile life" is a promotional slogan; but it is also a
statement of business aim and conviction.
As with all quality companies, our business starts by thinking
through the customer mind. Do that and you provide what customers
want and like. As a consequence, business grows and prospers.
All this is why I was delighted to be invited to become your Chairman
and to work with Charles and the whole team at The Carphone
Warehouse. Since I took up this role on May 1, I have been struck by the
talent, enthusiasm, commitment and innovation of the whole Group. I
have known the business for years, from the position of being a network
operator, and have always felt respect and liking for what I saw. As an
insider, I am even more impressed than I thought I would be by the
quality and the potential.
I can claim no credit for the performance and financials for a year
when I was not part of the business; but it is plain that they represent a
considerable achievement in a market that has been undergoing
fundamental change.
The role I hope I can play is to work with The Carphone Warehouse
team to help develop our strategy, and to help assure the full recognition
of our strengths and potential to create value for customers and
shareholders alike. I am confident of our position. I am confident of our
potential. I am confident of our ability to evolve and execute our strategy.
And I look forward to reporting regularly to you on our progress. Let
Charles now report on the year past and the prospects ahead.