Utility Warehouse

Last updated

Utility Warehouse
Company typeSubsidiary
Industry Public utility, Multi-level marketing
Founded2002
Headquarters Colindale, North London
Key people
 Charles Wigoder,
Andrew Lindsay,
Stuart Burnett
Products
Parent Telecom Plus plc
Website uw.co.uk OOjs UI icon edit-ltr-progressive.svg

Utility Warehouse is a multiservice provider based in London, England that uses multi-level marketing to obtain customers through independent distributors. [1] It is a brand name of its parent company, Telecom Plus. [2] [3] It currently handles approximately 1 million customer accounts. [4] Utility Warehouse supplies customers with landline telephony, mobile telephony, broadband, gas, and electricity. [5] The Utility Warehouse brand is the primary engine of revenue generation for Telecom Plus. [3]

Contents

History

Telecom Plus, a FTSE 250 company, established Utility Warehouse in 2002 [6] as a subsidiary and brand to encompass all of their residential energy, telephony and broadband offerings. [7] The Utility Warehouse headquarters is in Colindale, North London. [8]

In 2006, UW and Telecom Plus entered into an agreement with npower, under which npower would supply energy (gas and electricity) to UW customers. [3] UW sold its two subsidiaries (Electricity Plus and Gas Plus) to npower. A 2009 article by The Guardian reported that Telecom Plus's rates were generally average, and as much as 20% higher than the best deals. [1]

In 2013, however, npower sold the two former Telecom Plus subsidiaries back to Utility Warehouse for £218 million. [9] As a result, Utility Warehouse became one of the largest independent energy suppliers in the UK. [3] [9] The deal sparked commentary about the possibility of npower's parent company RWE leaving the UK, or the emergence of a "Big Seven" in place of the existing Big Six energy suppliers. [2] [3] [10] In 2023, UW reported that it was the seventh largest energy supplier in the UK, supplying around 3% of UK households. [11]

In 2021, UW agreed to pay £1.5 million into Ofgem's redress fund, after an investigation begun by Ofgem in 2018 found that since 2013 the company had not given sufficient support to customers in payment difficulties. [12]

In 2023, UW had over 360,000 broadband customers and over 420,000 mobile telephony customers. [13]

Products

The company supplies gas, electricity, broadband, mobile and landline telephony, [5] home insurance and a cashback card. [14] [15] Their telephony and energy services are often bundled to reduce costs for customers. [9]

Business model

Utility Warehouse employs a multi-level marketing model that utilizes independent distributors to obtain new customers. Distributors introduce both residential and business customers. [7]

Utility Warehouse has no shops and does not advertise on television or in the national press. The company uses word-of-mouth as a primary means of promotion, and offers bonuses to distributors who recruit new customers and distributors. [8]

Distributors gain a commission from their own customers and their distributor's customers, making Telecom Plus a multi-level marketing company. There is a joining cost to become a distributor (reduced if they become, or already are a customer). A 2017 Guardian investigation found that total commission paid to distributors in the previous financial year was £21.1 million, or less than 3% of revenue; if that amount was divided equally among the 41,717 distributors they would each receive £505 per year. [16] Utility Warehouse responded that the calculation was misleading: "there are many who for whatever reason earn considerably less than £500 per year, and there are those who work at their business extremely hard and earn considerably more than this". [16] In 2019, the average distributor earned £12 a week, prior to taking costs into consideration. [1]

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References

  1. 1 2 3 Jones, Rupert (7 December 2019). "Utility Warehouse: is its 'life-changing' scheme really ab fab?". TheGuardian.com.
  2. 1 2 "Npower sells some subsidiaries to Telecom Plus for £218m". BBC. 20 November 2013. Retrieved 6 October 2014.
  3. 1 2 3 4 5 Gosden, Emily (20 November 2013). "Utility Warehouse buys 770,000 customer accounts from npower in £218m deal". The Daily Telegraph . Retrieved 6 October 2014.
  4. ↑ "Trading update and notice of results". Telecom Plus. 11 October 2023.
  5. 1 2 Macalister, Terry; Jennifer Rankin (20 November 2013). "RWE npower supply sale raises fears over UK withdrawal". The Guardian . Retrieved 6 October 2014.
  6. ↑ "Utility Warehouse Limited". Companies House. Retrieved 4 June 2020.
  7. 1 2 Tieman, Ross (13 March 2009). "Company of the Year: Telecom Plus". Financial Times . Retrieved 6 October 2014.
  8. 1 2 Stafford, Philip (29 March 2009). "Telecom Plus boosted by word-of-mouth support". Financial Times . Retrieved 7 October 2014.
  9. 1 2 3 Chazan, Guy (20 November 2013). "Telecom Plus deal to challenge big six UK energy suppliers". Financial Times . Retrieved 7 October 2014.
  10. ↑ Gosden, Emily (20 November 2013). "Energy challenger Telecom Plus leaps to Big Six's defence". The Daily Telegraph . Retrieved 6 October 2014.
  11. ↑ "Telecom Plus PLC: Half-Year Results". London Stock Exchange. 30 September 2023. Retrieved 28 November 2023.
  12. ↑ Earl, Nicholas (10 November 2021). "Utility Warehouse pays £1.5m to Ofgem fund after failing customers in debt". CityAM. Retrieved 8 December 2021.
  13. ↑ Jackson, Mark (21 November 2023). "Utility Warehouse Top 363,595 UK Broadband Users and Change CEO". ISPreview UK. Retrieved 28 November 2023.
  14. ↑ "UW Cashback Card Challenge Utility Warehouse Cash Back". www.cashbackcardchallenge.com. Retrieved 15 February 2021.
  15. ↑ "Annual Report 2019". Companies House. 31 March 2019. Retrieved 4 June 2020.
  16. 1 2 Jones, Rupert (8 July 2017). "Get rich quick? Not with Utility Warehouse". the Guardian. Retrieved 18 November 2018.
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