US Retailer Celebrates 20th Birthday

The wireless industry passed a milestone this month when Los Angeles, USA based Celluphone, the nation's first wireless Master Agent, celebrated its 20th anniversary. Today, more than 3,500 independent retailers activate subscribers through Celluphone each month in eight markets across California, Texas and Illinois.

AT&T's Advanced Mobile Phone Services subsidiary, which was more commonly known as AMPS (an early incarnation of Verizon Wireless) and Celluphone signed what is believed to be the nation's first wireless sales distribution agreement in May of 1983, before the first cellular network launched commercially. Celluphone has remained an exclusive agent for Verizon (and it predecessors) for all 20 years in Los Angeles.

Initially, Celluphone sold according to the carrier-suggested model of direct sales and telemarketing. But Mitch Mohr realized that selling and installing phones at more than US$3,000 each was not the basis of a long-term business plan. 'All new products of value start through direct sale,'says Mohr, 'but if those products are going to last, they are going to sell at retail and they are going to need wide-spread distribution.'

Betting that wireless would be an industry that would last, Celluphone started signing hundreds of small retail sub-dealers in 1984, pioneering a role that later would be called a 'Master Agent.' Within a few years, Celluphone disbanded its own retail sales efforts and dedicated itself completely to its dealer distribution.

'We decided that to be successful, we were going to have to focus on one channel, either retail or indirect,'says Mike Mohr, Mitch's son and Celluphone's President. 'We chose to put our efforts into developing and supporting sub-dealers, in part because we had a special affinity for them, since we are family run and sub-dealers are usually family-run businesses. We also chose to focus on our Master Agent business because it was an under-served channel, and we believed that the growing competitiveness in the wireless industry actually made indirect distribution more necessary.'

That has not always been a widespread view. 'Almost from the beginning, I have heard people suggest that the indirect channel would whither away, especially the small dealers,'says the elder Mohr. 'In fact, the opposite is true. Last month, we had more active dealers, and more dealers applying to get into the business, than ever before. In reality, the need for independent retailers is growing, not shrinking.'

This view is supported by a recent industry study. A December 2002 survey of end-users, commissioned by the Consumer Electronics Association, indicated that about 50% of customers purchased their last wireless device through indirect distribution."

Posted to the site on 28th May 2003