A SWORD of Damocles is suddenly hanging over the head of Carphone Warehouse. The ancient original was suspended by a single hair over a golden throne, a warning of the fragility of life at the top. Carphone Warehouse’s founder Sir Charles Dunstone, who still holds a 23.5 per cent stake, now finds himself looking up at his firm’s modern equivalent – the prospect of EE breaking up with the chain.
The timing could hardly be worse. The long-touted £3.6bn Carphone Warehouse-Dixons merger finally looks on track, only waiting for the shareholders to vote on the proposals in July. Yet within weeks the UK’s biggest mobile operator could up sticks from Carphone Warehouse, running the risk of bringing on an attack of cold feet. Investors are already jittery – stocks fell in both companies immediately after the merger was announced, before recovering again.
While Carphone Warehouse’s fate doesn’t hang by a single thread – its deals with Vodafone and O2 would remain unscathed – EE is a large prize to lose at such a sensitive point. And it is an unwelcome reminder that mobile firms are increasingly interested in rethinking their relationships with third parties in favour of direct sales.
If there is cold comfort to be taken in all this, perhaps it lies in the fact there’s nothing personal about the review – Carphone Warehouse’s rival Phones4U will also be under consideration to end its EE deal. That’s a mote of reassurance, given that there were early murmurings of Phones4U horning in on Dunstone’s firm’s nuptials with Dixons and forming a closer tie-up with the electronics retailer itself.
IT’S GOOD TO SHARE
It is excellent news that Eric Pickles has seen the value of clearing away some of the underbrush of half-forgotten regulation standing in the way of the expansion of homesharing services like Airbnb.
Amending these rules is vital. Not only is it a step in the right direction, it is a signal that the welcome mat is out in London for the new breed of entrepreneurs using online services to liberate unutilised capital.
These services are part of one of the largest commercial innovations of our age: the world of peer to peer commerce.
Platforms are springing up to drive everything from peer to peer lending to car sharing to apartment rental. If regulators can’t figure out how their top-down methods can adapt to that new reality they are part of the problem, not the solution.