A day in the life of Charles Dunstone: 'If you want a meeting then do it over dinner'

Founder and chief executive of Carphone Warehouse
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The Independent Online


Charles Dunstone, the founder and chief executive of Carphone Warehouse, has been grinning since Christmas Eve. He knew then that sales at Europe's biggest mobile phone operator had thrashed forecasts over the key festive period. Today, 12 January, he can finally tell the City and shareholders.

By 7am Mr Dunstone has been awake for 30 minutes and is taking his first call from the press at his five-bed, four-storey home in London's swanky Holland Park.

Naturally, he is using the latest mobile - a sleek, gun-metal blue Motorola V3i. He switched from the shocking pink Razr from the same manufacturer the previous week.

That ultra-slim, bubblegum-coloured handset, which looks like the sort of communication device Paris Hilton would use were she ever to find herself on the bridge of the Starship Enterprise, was in no small part responsible for Carphone's stellar Christmas success.

In September, Mr Dunstone took a punt and asked Motorola to make 250,000 pink Razrs exclusively for Carphone. The £40m bet paid off quickly and another chunky order was placed. By the end of this month, 600,000 will have been shifted across Europe.

"The pink Razr wasn't my idea," Mr Dunstone admits. "It was the guy who runs our UK business. When he looked at sales demographics, there was a huge male bias in sales of the Razr. It was available in black and silver and he thought how could we make this more attractive to women?' Our timing was just perfect."


After a 10-minute drive to Carphone's headquarters near Acton in west London, Mr Dunstone sips coffee and e-mails staff. He thanks them for their contribution to the company's extraordinary success at a difficult time for many others on the high street.

Critics note that many of his 12,000 workers are poorly paid, but he gives them cash when they marry or give birth and sends cake on birthdays.

The stock market opens and Mr Dunstone watches the early trading in Carphone shares on the back of that morning's trading update.


Calls from analysts and the press kick off in earnest.

"Everyone you talk to has a slightly different slant," he sys. "It's always interesting to see how someone puts our figures in context with the rest of the market."

The figures go down well, with one analyst describing the update as "spectacular". Carphone sold about 30,000 mobiles a day during peak Christmas trading and set a company sales record in December.

During the three months to the end of December, it hooked up 30 per cent more mobile customers than in the same period of 2004 - about twice the number experts had expected. Total connections, including fixed-line ones, were up almost one-third on last time. Revenues grew more than 7 per cent and gross profits jumped more than 13 per cent.

Mr Dunstone reassured the City that pre-tax profits now look likely to come in at the top of expectations this year. That should be about £135m, £7m more than previously thought.


Lunch is a chicken salad sandwich at his desk. "We have a culture here that discourages business lunches If you want meetings, you do it over dinner."

During a conference call, he outlines his strategy for the business. The group is increasingly operating telecoms services under its own brand. Fresh, the budget international calls service relaunched in November, is expected to lose £5m over the year to the end of March as it tries to lure customers from bigger rivals such as Vodafone and O2.

Sales in the next three months should be boosted by more new shops. Carphone has opened 126 stores in the past quarter and now has more than 1,700 outlets in 10 countries.

The group, which derives about 40 per cent of its revenues from abroad, has snapped up a chain of nine mobile shops in Spain. "What we are aiming to do is replicate across Europe what we have done here in the UK. It's the same principles, same look. Everything."

At home, Mr Dunstone's ambition is to build Carphone's TalkTalk fixed-line business into BT's biggest threat. "There is no real consumer brand to compete with BT. Someone ought to be out there making them honest and giving customers a choice. No one has tried seriously to put the principles you learn as a consumer retailer into residential telecoms."

Built from scratch over the past three years, TalkTalk is now in 2.4 million homes and is used by about 10 per cent of Britons.

The service may have drawn flak for its aggressive cold-call tactics, but evidence suggests that once customers sign up they recommend it to friends. Revenues from fixed-line were up more than 40 per cent to £140.5m in the past quarter. Towards then end of last month, Mr Dunstone unveiled the takeover of Centrica's landline phone service, Onetel, for up to £154m - his biggest acquisition so far.

The deal sent Carphone shares to an all-time high, at last comfortably above the flotation price in 2000 at the peak of the dot.com boom. Mr Dunstone, 41, still owns 34 per cent of the -company, which is valued at £2.3bn.

Since opening his first shop on Marylebone Road in London in 1989 with £6,000 of he savings, Cambridge-born Mr Dunstone has amassed an estimated personal fortune of £780m.


A journalist asks Mr Dunstone the secret of his success. He puts his achievements down to commitment not cleverness. "We just try harder. If you aim just to do the same as everyone else you won't succeed. You have to aim beyond them."

Those who know him attribute his stellar success more to an instinctive understanding of his customers and the industry. How many retailers would have the foresight to corner the market in pink Razrs?

Carphone goes from strength to strength while facsimiles - such as the Link - and plenty of others are struggling.

Its business model is canny. Operators and handset makers fork out to innovate so they can whip up demand in what should be a saturated market. On top of that, they pay Carphone to sell their products.

There are, it is said, more mobiles in Britain than people. But Britons typically change their mobile every 18 months.

The company has built its 23 per cent of the market on a reputation for independent advice and service. It has no alliance with any single mobile operator and its salesman are paid no commission.

In a low-margin, high-turnover business, about 60 per cent of Carphone's revenues are earned after the customer leaves the shop, because the company gets a share of the contract revenues.


A quick run around Tesco Metro and Mr Dunstone is back home, sitting on his sofa in front of the television and tucking into some ham and cheese.

A programme about the possibility of commercial space flight brings to mind one of the two men Mr Dunstone most admires: Sir Richard Branson, the man behind the Virgin empire. "He is the godfather of all new-wave businesses that have gone into established markets and tried to do things better."

The desire to improve, he says, is a characteristic shared by the other man he most admires. "I know it's not very popular, but I do admire Tony Blair. I can't understand why he puts up with us all and keeps on doing it.

"I'm an optimist. I am always excited by the prospect that something can be done better. He has had a massive reform agenda, and he is an optimist about making things better."

As images of spacecraft drift across the screen, Mr Dunstone added: "It makes my ambition to sell broadband look pretty low really."