Mobile phone sales drop in UK
09:31 Wednesday
January 2, 2002, Telecom.paper
Mobile phone sales in the UK have dropped dramatically over the Christmas period, according to a report in the Daily Telegraph. Handset sales over the last three months of the year are forecast, at less than 5 million, to be under half those achieved a year before. The number of new customers who did not already own a mobile phone is also expected to have dropped sharply, from 5.7 million in the last three months of 2000 to 1.5 million this year. The declining demand is explained by the current economic uncertainty and the delayed introduction of new mobile technology. Three quarters of the UK population already owns a mobile phone, so it is difficult for firms to keep up their rate of subscriber growth. Also the withdrawal of many cheap introductory deals causes the sales drop. Carphone Warehouse had expected weaker sales growth. Supermarkets, which focus on pre-pay phones, had suffered worst from the market squeeze.
telecom.paper.nl
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Carphone Warehouse shares hit by lower Christmas sales
By Reuters staff
02 January 2002
Shares in Carphone Warehouse Group Plc, Europe's largest mobile phone retailer, slid 12 percent on Monday following a report of sharply lower UK handset sales in the key pre-Christmas sales rush.
Carphone shares dropped 15 pence or 12.2 percent to close at 108p in light tradein London, where the market closed early for the New Year holiday. The stock underperformed the FTSE All-Share index by 35 percent in 2001, losing a fifth of its value since December 7.
The Sunday Telegraph newspaper, citing research by tech-focused investment bank Soundview, reported that mobile phone sales in the UK had nearly halved to 5.5 million handsets in the run-up to Christmas, down from 10 million in 2000.
Sales were also hit by the main network operators cutting subsidies on handsets to discourage low margin "pre-pay" phones, which accounted for over 90 percent of the Christmas 2000 market when a handset could be bought for as little as 20 pounds ($29).
A Carphone spokeswoman said Chief Executive Charles Dunstone had expected a 40 percent drop in the overall market, but that Carphone would outperform it and improve on its 20 percent share of the market in the process.
"The people who were buying were buying from mobile phone shops," the Telegraph quoted Dunstone as saying. "There has been a big fall in sales at supermarkets, which don't sell anything other than pre-pay."
The mobile phone seller will issue a Christmas trading statement on January 23, the spokeswoman said.
Network operators including Vodafone Group Plc, mmO2 Group Plc, Deutsche Telekom's One 2 One, and Orange have all made determined efforts to boost their average revenue per user as markets become saturated and new users provide less growth.
The Telegraph said the number of net new subscribers had also fallen sharply - to 1.5 million in the final quarter, compared to 5.7 million in the last three months of 2000.
Carphone Warehouse, worth around one billion pounds and a member of the FTSE 250 mid-sized company index, reported a 20 percent rise in first-half profit in November and said sales had grown two percent in the five weeks since the end of September.
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