New Way International has bolstered its team with the appointment of a new UK sales manager.

The distributor has appointed Sonny Sahota to the position, a role he takes up after spending five years at IT solutions specialists Jigsaw24 where he was senior Apple account manager.

Sahota has also previously held roles at Square Group, Computer Warehouse Ltd and British Market Research Bureau.

NewWay International European managing director Nigel Prince has welcomed the appointment.

“Sonny has a vast range of experience in the European B2B market that complements our existing UK business and supports the existing UK team going into the back end of 2019 and into 2020.

“This will support our growth going into a turbulent few months whilst Brexit is on the final countdown up to 31^st October 2019.”

Sahota has spent over 15 years working for Apple resellers and hopes to utilise this experience to drive growth in the UK for New Way.

“I saw the opportunity to go and work for a distributor as opposed to a reseller, I saw it as a step up. I hope to bring my wealth of contacts to the business and help New Way focus on Apple and its other key brands.

“I’ve come onboard with the task of growing New Way’s UK market which is an area that can be focused on. I plan to do this by utilising my contacts and also using my industry experience.”

Nearly three years since the UK voted narrowly in favour of leaving the European Union, that exit is – supposedly, at least – nearly here.

In the referendum vote in June 2016, the ‘Leave’ campaign narrowly edged out ‘Remain’ by 51.9 to 48.1 per cent, with over 17.4 million people voting for the UK to leave the EU.

Since the results were confirmed, British politics has been dominated by the so- called Brexit, with debate after debate in the House of Commons over how to secure the best outcome for the country.

Prime Minister Theresa May has already seen two proposed Brexit deals rejected by fellow MPs, with the process proving anything but straightforward and causing uncertainty for UK businesses.

There have been debates over a hard or soft Brexit, as well as several calls for either a second referendum or a “people’s vote”, with MPs voting in March to seek a three-month delay to Brexit until June 30.

With so much uncertainty, what does this mean for UK telecoms and its consumer and business-to-business markets?

TRADE AND SUPPLY

Trade between the UK and member states is expected to become disrupted as Britain exits the EU – which has effectively become a single market in which goods and people can move around as if within a country.

With the UK set to leave, many also expect the value of the pound to suffer against the euro – at least in the short term.

This is a “real concern”, says Nigel Prince, managing director at distributor New Way International. “There’s a big worry about how the currency will become affected as result of Brexit. It’s a real concern how strong the pound will be against the euro and US dollar.”

There may also be supply chain issues, says Imran Choudhary, director for technology at research company GfK.

“Aside from the currency, other negative impacts are likely to include disrupted supply chains and logistics, and higher admin costs,” he says. “For the B2B industry it will have an impact on what it will be able to export.”

In addition, concerns have been raised over a potential return of roaming charges for using data when abroad in the EU.

However, Three (for one) has announced that it will not add any additional roaming costs, regardless of the final Brexit outcome.

Three CEO Dave Dyson said “We’re committed to eradicating excessive roaming charges and will retain this customer benefit regardless of Brexit negotiations, allowing our customers to continue using their usual allowances when they travel within the EU.”

Following Three’s announcement, CCS Insight senior analyst Kester Mann believes it will be difficult for any of the other operators to apply additional costs for roaming.

“I don’t think operators will revert to this, as the UK is such a competitive market – plus these operators already offer roaming outside the EU as a differentiator.”

“In theory the operators could introduce this but if the operators backtrack on this because it could be risky for them.”

CONSUMER CONFIDENCE

There are also questions over consumer confidence during the period of uncertainty caused by Brexit.

This comes on top of several factors that have already contributed to a decline in the UK smartphone market in recent years, as it has matured.

Increased product lifecycles, better hardware and higher prices have led to consumers holding onto their phones for longer – and Mann believes that although these struggles would continue even in the absence of Brexit, the UK’s departure from the EU will not help the market.

“The downward trend will continue with or without Brexit, despite the innovation we saw at the Mobile World Congress,” he says. “However, with Brexit we might see that consumer confidence won’t be as strong, as people will be more nervous about making big investments.”

Choudhary, meanwhile, says that British consumers have been “stoic” in the face of the unknown, but does foresee a downturn in SIM-free handset sales.

“These sales will come under increasing pressure,” he says. “They are currently on a growth trajectory, but this could be dampened by Brexit. Consumers may be less likely to spend money on brand new phones.”

PLANNING AHEAD

With Brexit looming, many businesses will have planned for the future with this in mind – something that has been the case for New Way.

The distributor, which has a business in Germany, opened a further centre in the Dutch city of Rotterdam in September.

In the event of Brexit, this international presence also offers backup for the business, including staff, logistics functions and a warehouse.

Despite not being too concerned about the UK’s departure harming how New Way operates, Prince says that having a plan to cater for it is essential.

“We’re one of the more fortunate UK businesses, as we already have an established business out in Germany,” he says. “With this, we have staff, logistics and a warehouse, and this offers us a backup plan.”

Prince adds: “We’re ready to do what we need to do, whether that is moving stock around or selling stock in Europe directly.”

Meanwhile, vendor Alcatel has said it has been planning ahead for the worst-case scenario in the event of Brexit, inlcuding for the possibility of a no-deal outcome.

At the Mobile World Congress, Alcatel’s UK and Ireland country director William Paterson told Mobile News that the firm has planned for the worst when it comes to potential stock issues.

“We planned and reorganised the supply chain to bring in products in a sufficient manner,” he said. “We will be bringing products directly from China to the UK and avoiding customs in Paris.”

5G QUESTION

There is also a question surrounding whether Brexit will affect the launch of 5G in the UK, given the investment required at a time of uncertainty.

Operators EE and Vodafone plan to debut the technology this year, with EE launching in 16 cities and Vodafone in 19 this year.

Mann doesn’t believe, however, that 5G rollout will be affected, as the infrastructure is already in place.

“I don’t expect 5G to be impacted by Brexit,” he says. “EE in particular is determined to be at the forefront of this and Vodafone isn’t far behind.

“It seems to be full steam ahead for 5G, and the operators seem to be pushing on with plans rather than reining them in. It appears that Brexit isn’t influencing this, which is quite encouraging.”

Choudhary agrees, adding that he doesn’t think the UK will fall behind with 5G because the investment has already been put in place. 

“5G is critical to the development of the mobile industry,” he says. “The capital expenditure required for 5G has already been thought of and all the mobile operators are working towards this.” 

Choudhary does, however, believe that the Brexit situation could affect SMEs and larger businesses.

“Brexit might have a broader impact on the SME and corporate landscape in the UK, as a lot of these businesses might be planning investment in IT and telecoms infrastructure,” he says. “The uncertainty around Brexit might put them off investing in 5G hardware.”

BRIGHT SIDE?

While Brexit is anticipated to be a challenge for the UK’s telecoms industry, will there be any positive outcomes for the telecoms industry?

Some think so – or, at least, that the impact will be relatively neutral. Edward Elliot-Square, sales director at phone trader IPT.cc, says, for instance that the uncertainty doesn’t phase him.

“I’m not worried at all,” he says. “I think it is going to be positive for the industry if anything, in particular for the mobile industry.”

Elliot-Square believes the UK will be able to control its own laws and regulations, and could even become a focal point for trade.

“There will be new rules to adhere to, but this might even see the UK become a trading hub, the likes of which we see in Switzerland and Dubai,” he says. Under this scenario, he explains, other countries could “trade with confidence” with the UK because they would be dealing only with that country.

Elliot-Square also believes that from a mobile manufacturer perspective, little will alter.

“Most, if not all, of the mobile manufacturers are outside the EU, so nothing is going to change. There’s no duty on the movement of mobile phones across Europe, so I don’t see how there can be an issue with Brexit,” he says.

Eurostar Global Electronics MD Peter Carnall, meanwhile, says it will be “business as usual” once the UK leaves the EU.

Carnall shot down fears that Brexit will slow down goods entering the UK and revealed that the distributor has explored contingency options over the past two years.

“There’s not going to be a delay on products entering the UK; if we leave the EU, the goods will still come to us at the same speed they do now,” he says.

“There’s a fallacy that the doors are going to come down and goods will take forever to be shipped. I don’t think the UK government will allow that to happen.”

WAITING GAME

Although it is difficult to forecast the UK’s future with Brexit on the horizon, the shared feeling among those in the mobile industry is therefore that the impact won’t be too detrimental.

But Choudhary thinks it is a case of playing the waiting game before the full implications of Brexit for the mobile industry can be determined.

“Although most businesses will have planned for Brexit, it’s difficult to know exactly what will happen, and the long- term effects won’t be known for years,” he says.

He believes the final impact of the UK leaving the EU will hinge on how much of a hit there will be on consumer and business confidence in spending.

New Way International has been awarded ISO 9001 accreditation, which means the distributor can work with some of the largest insurance companies.

The award on March 5 means that New Way can approach larger corporate insurance companies to distribute its devices.

To achieve the accreditation, New Way spent six months documenting all the physical processes in its workplace, something that is required to earn a certificate.

Feltham-based New Way has partners including A1 Communications, Mobile Phones Direct and Ebuyer, with 750 customers on its books.

New Way managing director Nigel Prince said of the accreditation: “It’s important for our business, as we’re involved with graded products and we like to service the insurance market. This was an area we weren’t very good at and we felt this would be valuable for the business.”

DEMAND

He added: “We’ve seen there has been demand from some insurance companies for our services, and now we’re ISO 9001 accredited we can overcome this stumbling block, as this certification will give these businesses more confidence in how we work.”

New Way is also looking to achieve ISO 14001 accreditation, an environmental management certification, and in the longer term ISO 28001, which focuses on security management systems.

Mark Broadbent, an account manager at field marketing company Ignite Technology, has been the envy of his colleagues after returning from an all-expenses trip to the Abu Dhabi Grand Prix courtesy of distributor New Way International.

Broadbent won the prize of two tickets to the Grand Prix with the fastest time in a Virtual Reality Formula One car sponsored by New Way at the Mobile News Awards.

“It had always been an aspiration to attend the Mobile News awards dinner and be part of a team that won something. Little did I know the evening was going to be such a large event for me”.

Broadbent was a guest of Tech21 which picked up the award for best accessory manufacturer.

“My first word was ‘car’. I used to go-kart competitively setting lap records at a number of tracks in Yorkshire so I am well used to the cockpit and design of the cars. The Oculus virtual reality headset was great even though I used to work with their rival HTC Vive! I was top of the lap charts right away, It was a very nervous two hours later till I was announced as the winner of two tickets to the Etihad Airways Abu Dhabi Grand Prix with hotel and flights included”.

New Way International managing director Nigel Prince said: “We were delighted to be involved as a sponsor at such a prestigious event in 2018 and even more delighted to give away the prize of tickets to the Abu Dhabi GP 2018 plus flights and hotel. Newlyweds Mark and wife Emma had a fantastic time”.

Prince exudes confidence that is coursing through New Way, which was founded by 100 per cent shareholder Mandeep Singh in 1999. So much so, that the distributor forecasts a 20 per cent increase in turnover from £152m by the end of the next financial year.

The founding year of 1999 was labelled by Prince as the end of the brick phone era and the beginning of the mobile revolution, changes which led to plenty of early success for New Way. The firm almost hit £250 million turnover in 2012. It became a limited company in 2003, changing its name from New Way Associates to its current moniker.

New Way International operates in Feltham, close to Heathrow airport in west London. The main office is 23,000 square feet and houses 44 staff. New Way has 750 customers on the books. Key UK partners include A1 Communications, Mobile Phones Direct and eBuyer. Prince claimed turnover will be around £152 million, similar to 2016’s figure. Official figures for 2017 ending on March 31 were not ready at the time of writing.

Not one to be discouraged with the static figure, the channel veteran is looking forward to 2018. Movements have already begun with around £50,000 already spent this year on marketing, boosting profile and targeting a ‘gap in the market’ in independent retailers.

“By the time March comes around no one is going to sit there asking who we are. They will have already seen our adverts and we will be more established by then. New business will come knocking on our door,” said Prince.

“It’ll be nice to get at least a 20 per cent increase in growth (turnover). It’s important we bring in sales guys to exercise our strategy and grow the business to where it should be.”

Veteran
Prince is a veteran, having began his career in mobile at Carphone Warehouse as commercial operations manager in 2009. He stayed there for two years and, after a six-month stint with mobile trade-in firm Cash4Phones as head of business development, he looked abroad.

He was head of global business development for Spanish mobile phone recycling company Hispanotec Recycling in 2011 before jetting off to Hong Kong to assume the role of global purchasing director at mobile recycler Telecom Generation from 2012 to 2015.

He came back to the UK in his current role in 2015. With his vast experience and fresh targets, Prince believes New Way can be pushed into new directions to fuel expansion and growth. The MD admitted New Way had been “under the radar” in the past few years, operating with a cautious strategy until now, when the firm decided to build more of a presence in the market.

According to Prince, pre-2015 New Way wasn’t doing enough to establish direct relationships with vendors, which led to shipment volumes declining.

New Way’s approach with vendors changed in April 2015 when they struck a direct partnership with the world’s third-largest manufacturer Huawei (according to IDC).

The distributor partners directly with a number of other well-known manufacturers including LG, TCL Corporation and Bullitt Group. This was different just two years ago, a period during which Prince now acknowledges New Way needed to change to compete with bigger rivals in the distribution game. New Way also distributes mobile phones indirectly from other top vendors such as Apple, Samsung, HTC and Nokia.

“New Way is a hugely successful business. What it wasn’t very good at was having direct manufacturer relationships. I was brought in to open that avenue up. We could see the volumes we used to deal with were declining and that was purely down to the way manufacturers wanted to operate.

“It was quite challenging for us, we really needed to refocus a lot of our efforts solely on the UK. Around 80 per cent of business was in Europe and 20 per cent in the UK. We could see globally the business was changing. So it was key we started relationships directly and obviously that takes a bit of time,” said Prince.

Stock management was not up to a standard manufacturers demanded, according to Prince. So began the installation of management software Microsoft Dynamics. Vendors demanded a live stock system and constant reports. Before January stock was managed through spreadsheets; the installation of Dynamics essentially brought the firm up to date, preparing it for future partnerships and lifting it from below its rivals.

“I think the key thing for us was understanding that without an operating system, going forward working with vendors was a no-go. So the option was to either upgrade the system or don’t do this. The upgrade put us in a good place where we can do all these other things but it was really a case of looking at our service proposition and how we operate, organising the back end of our operating system and getting that into a really good place before elevating profile, as we’ve been slightly under the radar.”

Strengthen
A gap in the market was identified at the end of 2016, with distribution to 2,500 independent retailers. These include newsagents or corner shops that serve a wide variety of products from food to technology. A present partner is Krystal Express, which has five chains across central London.

Prince believes this is an underserved market with the potential to drive turnover by 20 per cent. To enact this strategy New Way bolstered its ranks in January with UK sales manager Keith Bennett, and will further strengthen the sales team with six new hires bringing total staff to 50 in 2018.

Prince acknowledged independent retailers will lack the scale of bigger partners such as Amazon. The distributor will support them with marketing, point of sale and accounts, making it simpler to a simpler business to consumer proposition. Prince said: “The key question we asked was ‘where is the gap in the market?’ Because these independents have been around for years and online retailers are well established, we felt that the independent retail market was where there was a gap.

“They don’t have to order 500 phones, we’re not going to deliver a pallet to their door and they don’t have to pay for several hundred items. We can operate as we do with our retail business like a direct-to-consumer relationship, if they want just one product a day, we can do that. Thats how you can grow your business. If there are 2,500 independent shops ordering one phone a day, thats as good as getting one order for 2,500 phones.”

Challenge
A fresh challenge lies ahead in refurbishing and selling used mobile phones. New Way sells a variety of technology to consumers online through the Ultimate Phone Shop, which contributed over £1million in turnover last year. Work has begun on improving the website and expanding its functionality to work in sync with refurbishment. The firm began the groundwork in its refurbishment venture last month by purchasing repair equipment.

The aim, according to Prince, is to grow that figure five-fold next year. “Last year it would have turned over just a £1m. There’s a lot more penetration we can do, we can probably grow this four or five-fold,” said Prince.

According to a report from Persistence Market Research this year, revenue for the global refurbished and used mobile phone market will stand at $1.97 billion (£1.47bn) by the end of 2017. This figure is forecasted to expand at a compound annual growth rate (CAGR) of 8.9 per cent in 2025.

“There’s a huge market now for refurbishment in the UK. We’ve already started working on it and we’re going to get into that market next year,” said Prince. “We can see there’s an opportunity, so if we can do it around next year with the online piece that will be a good starting point.

“Our website is undeveloped, it does a relatively good job in selling products but that’s all it does. So we’re selling products – OK, fine – but we really need to grow online. We have to offer more services and opportunities. Bundling products, offering insurance and trade-in cash can all generate margin at the end of the day.

“You can’t just focus on selling a phone and expect that to be a massively successful online business. You need the whole spectrum.”

European base
The challenge of Europe has not been placed on the back burner, with serious moves revealed for next year.

New Way will solidify its base in Europe. It already operates a German arm called New Way GMBH in Frankfurt. Prince manages this operation on top of his duties at home. He’s striving to mirror the Feltham base in Germany by establishing a central office with its own warehouse to cater to big partners such as Amazon.  The aim is to have this German arm contribute to 25-30 per cent to turnover within 12 months of opening.

“We’ve just started really to establish in Germany and thats going to grow hopefully this financial year.

“Next year we want a central office, possibly in Munich. Ideally, we’d run all German operations under one roof and have everything centralised. There’s potential with what we could do with more sales staff based there and that’s what we’re doing next year. From that point we can start building properly with staff and infrastructure.

“The idea is to have a mini version of our base in London and not rely on a third-party warehouse. We have a direct account with Amazon which takes a lot of time and effort working with such a huge retailer.”

In this weeks show we discussed biometric facial recognition software with GFK Director of Technology Imran Choudhary and Deloitte head of Technology, Media & Telecommunications research Paul Lee.

We also spoke with New Way International Managing Director Nigel Prince about his involvement in the upcoming Mobile News awards this March and of course we had a word with features editor Manny Pham about the new Mobile News magazine issue out this week.