The press coverage was wall to wall last week after Vodafone announced it had signed an exclusive distribution deal with Currys, the new brand that incorporates all the old brands of Dixons Carphone Group.
But it seemed to pose more questions than it answered, not least for iD Mobile, the Dixons Carphone MVNO. The team there had to put out a statement to confirm that the deal doesn’t impact the iD brand or its agreement with Three, the network behind the MVNO.
Of course the big question is why Vodafone, and why now?
Over my wholesale career I’ve had dealings with both of the brands and I can see a plan in play. Yes, you might think this is a last throw of the dice from Curry’s but actually it’s savvy on the part of Vodafone.
Why’s that? On the surface, you could argue that Vodafone had exclusivity already. All the other operators had abandoned Carphone Warehouse, which had significantly impacted its ability to offer impartial advice.
But you have to consider that Vodafone is likely to be playing a long game. Firstly, it knows from experience that this channel has the potential to drive connection volumes and there is no doubt that the Currys brand still captures a lot of footfall and web traffic.
Secondly, in its distant past it left CPW only to return later. The press coverage back then asked if the brand would last. It clearly did. And that’s why Vodafone’s strategy is so interesting. Could the exclusivity be a smart way to ensure others can’t get in if the channel continues to perform? I’d wager the conversation has been had.
Then of course there is the brand and product fit. Curry’s customers are likely to have more in common with the Vodafone core consumer demographic, and when you factor in the Vodafone ‘V’ smart devices you can see some real synergies. It certainly makes more sense as a retail partnership than the retail trial O2 announced with Next back in 2019.
And speaking of the long game, let’s speculate for a moment that maybe Vodafone is thinking that over time it may be able to win the iD MVNO business. It certainly measures up well. It has a substantial customer base and is proving its value in the market. It targets a different market to Vodafone so passes the incremental customer test any MVNO goes through when being assessed by an operator. It would also give Curry’s customers another choice.
Those with you that have been around a while will remember that Vodafone and CPW had an MVNO in the past. So this deal, and recent market statements that confirm Vodafone’s commitment to MVNOs, makes me wonder if they could mount a bid to win the iD business from Three when the contract is up for renewal.
iD’s statement would suggest otherwise, plus there’s Voxi, Vodafone’s youth sub brand, to consider. Though we don’t know the full details, if the exclusivity deal includes Voxi then that presents genuine competition for iD and means it could potentially lose customers in the Curry’s channel.
I can’t see anything radical happening tomorrow, or even by the end of the year. But I wouldn’t be surprised if there’s more to this than meets the eye and we find ourselves analysing more exciting moves with these brands in the future. For now, there will be much to do to make the new partnership work and hit the numbers.
My overall sense on this is one of encouragement – it’s good to see that telecoms is still important to Curry’s, and there’s long-term intent to make its mark in the market. And if nothing else, it continues to give consumers choice, shareholders optimism, and provides relief for iD.
Do you have questions about the deal? Think you need to run a strategic review or recut your segmentation as a result? Drop me a line, I’m happy to give you my perspective and some strategic counsel.