Cellular Kings Have Hot Line to Boom Time

Article excerpt

TO CROSS the Stoke-on-Trent ring road from the city's railway station involves negotiating a pedestrian subway of Byzantine complexity, lined with dull and crumbling tiles covered with graffiti. What a pleasure it is to emerge by the handsomely re storedVictorian building that once housed Minton Hollins, tilers to the House of Commons and many a suburban villa.

The Minton factory had been empty for 30 years until Caudwell Communications turned it into its corporate headquarters last summer with a pounds 500,000 grant and an additional outlay of pounds 1.8m.

From tiles to telecommunications, manufacturing to sales: the sooty landscape of the Potteries, immortalised by Arnold Bennett, has changed with the times.

For John Caudwell and his brother, Brian, times have changed beyond measure since they started selling mobile phones from a 10ft-square room behind their car showroom. It was 1986, and "yuppies" were thin on the ground in Stoke. John had experienced somedifficulty in buying a phone for his own car. Eventually he went to Motorola, the manufacturers, and was told he would have to open an account.

"I bought 26 and started a dealership," he recalls. " It took us six months to sell them. At that time, they were considered expensive toys for executives. The retail price was between pounds 1,500 and pounds 3,000. Reasonable profits but low volume. Still, we fore s aw that the market would grow, because the price was coming down and awareness was going up. Plumbers and TV repair men were going to find them very useful. It was obviously going to be a buoyant market."

It turned out to be a shrewd hunch. The UK cellular market grew by 43 per cent in 1993 and by more than 50 per cent last year. There are now more than 3 million users, and analysts are forecasting four times that by the end of the century.

The Caudwell brothers were well placed to take advantage of the boom. They are now Europe's biggest independent wholesale distributor of cellular phones. Turnover has rocketed from pounds 1m in 1989 to a projected pounds 80m-plus this year. "We're projecting pounds 250m by the time of our stock market flotation in 1997/98," says John Caudwell.

Overseas sales already account for 30 per cent of business. …