Carphone Warehouse has struck a deal to sell Virgin Media’s broadband, digital TV, home phone and mobile services in its stores. So it is actually offering a broadband fixed line package that is in direct competition with its own TalkTalk service. Does any sane business offer a leg up to its competition?
In fact Charles Dunstone, Carphone Chief Executive, said he hoped to strike more broadband deals and did not rule out offering to resell the services of fierce rival BT! The answer as to why he is doing this can be seen in the Carphone stores where they are setting aside room for The Broadband Shop. This is dedicated area gives a choice of mobile broadband services from T-Mobile, Orange, 3, fixed line through ADSL from TalkTalk and AOL Broadband (also owned by Carphone) and via Cable through Virgin Media.
The more fascinating question is how can they do it, how can they take the risk of offering products from direct competition? We think the answer lies in Carphone’s relative Competitive Strength compared to many of its rivals. To see what you think go to the Competitive Strength website and see how you think Carphone compares to Virgin Media and what conclusions you can draw.
Our only concern would be just how long Virgin Media will remain a viable player in this market (see our article “The Doorway to The Abyss” on this). However if they do not then Charles Dunstone is likely to have others queuing up to take their place. Carphone Warehouse can…. So it does. Many of their rivals can’t …. So they just can’t!
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