Cellnet is to acquire a 40 per cent stake in Dixon?s communications retailer, The Link for a total of #57 million.
The mobile phone operator hopes the move will help increase its presence in the high street against tough competition from established rivals and newer players such as Orange. Orange streaked ahead of Cellnet in last quarter?s subscriber market figures (see story 3 April).
Cellnet dismissed suggestions that it is seeking to control the retailer and said the investment would help Dixon?s plans to increase the number of stores from 86, many of which are in the south east, to 200 nationwide. As well as selling Cellent phones and networks it will continue to offerOne 2 One and Orange services, confirmed a Cellnet spokesperson. The Link stopped selling Vodafone services after poor sales last year.
The Link was established in 1994 and specialises in the sale of communications products and services, including mobile phones, fixed line telephones, faxes, pages, as well as a range of BT services. It made a loss of #2.9 million on turnover of #21 million in the year to April 1996. Cellnet has been hit hard recently by an 85 per cent drop in subscribers between January and March, compared to last year, and the abrupt departure last month of its managing director, Howard Ford.
Meanwhile, rivals Vodafone, One 2 One and Orange reported strong increases in subscribers last quarter. Taking a stake in a high street retailer is one way to help grow marketshare. Vodafone, the market leader, has interests in a number of airtime service operators including retailers Radio Rentals, Granada and Comet. Cellnet will pay an initial #25 million with further payments of up to #32 million over five years.
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