Utility Warehouse

Utility Warehouse (branded as UW) is a multiservice provider based in London, England. It is a brand name of its parent company, Telecom Plus.[2][3] It currently handles over 650,000 customer accounts with the help of over 45,000 independent distributors. Utility Warehouse supplies customers with landline telephony, mobile telephony, broadband, gas, and electricity.[4] The Utility Warehouse brand is the primary engine of revenue generation for Telecom Plus.[3]

Utility Warehouse (UW)
TypeSubsidiary
IndustryPublic utility
Founded2002
HeadquartersColindale, North London
Key people
Charles Wigoder,
Andrew Lindsay
Products
Revenue£876 million (2020)[1]
£48 million (2020)
Number of employees
1,299 (2019)
ParentTelecom Plus plc
Websiteuw.co.uk

History

Telecom Plus, a FTSE 250 company, established Utility Warehouse in 2002[5] as a subsidiary and brand to encompass all of their residential energy, telephony and broadband offerings.[6]

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.

In 2013, however, npower sold the two former Telecom Plus subsidiaries back to Utility Warehouse for £218 million.[7] As a result, Utility Warehouse became one of the largest independent energy suppliers in the UK.[3][7] 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][8]

Operations

Utility Warehouse employs a multi-level marketing model that utilizes independent distributors to obtain new customers. Distributors introduce both residential and business customers.[6] The Utility Warehouse headquarters is in Colindale, North London.[9]

The company supplies gas, electricity, broadband, mobile and landline telephony,[4] and home insurance.[10] Their telephony and energy services are often bundled to reduce costs for customers.[7]

In 2018, the company came seventh out of thirty companies in the Which? energy customer survey, with high scores for online customer service and value for money; earlier that year it received the Which? Utilities Brand of the Year award.[11]

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.[12]

Marketing

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.[9]

Distributors gain a commission from their own customers and their distributor's customers, making Telecom Plus a multi-level marketing company. There is a £100 joining cost to become a distributor (reduced to £50 if they become, or already are a customer).[12] 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.[13] 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".[13] In 2019, the average distributor earned £12 a week, prior to taking costs into consideration.[14]

References
  1. "Annual Report 2020" (PDF). UW. 31 March 2020. Retrieved 30 July 2020.
  2. "Npower sells some subsidiaries to Telecom Plus for £218m". BBC. 20 November 2013. Retrieved 6 October 2014.
  3. 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. Macalister, Terry; Jennifer Rankin (20 November 2013). "RWE npower supply sale raises fears over UK withdrawal". The Guardian. Retrieved 6 October 2014.
  5. "Utility Warehouse Limited". Companies House. Retrieved 4 June 2020.
  6. Tieman, Ross (13 March 2009). "Company of the Year: Telecom Plus". Financial Times. Retrieved 6 October 2014.
  7. Chazan, Guy (20 November 2013). "Telecom Plus deal to challenge big six UK energy suppliers". Financial Times. Retrieved 7 October 2014.
  8. Gosden, Emily (20 November 2013). "Energy challenger Telecom Plus leaps to Big Six's defence". The Daily Telegraph. Retrieved 6 October 2014.
  9. Stafford, Philip (29 March 2009). "Telecom Plus boosted by word-of-mouth support". Financial Times. Retrieved 7 October 2014.
  10. "Annual Report 2019". Companies House. 31 March 2019. Retrieved 4 June 2020.
  11. "Utility Warehouse Review". Which?. Retrieved 26 May 2019.
  12. Jones, Rupert (4 December 2009). "Utility Warehouse under the spotlight". The Guardian. Retrieved 26 April 2014.
  13. Jones, Rupert (8 July 2017). "Get rich quick? Not with Utility Warehouse". the Guardian. Retrieved 18 November 2018.
  14. Jones, Rupert (7 December 2019). "Utility Warehouse: is its 'life-changing' scheme really ab fab?". the Guardian. Retrieved 22 October 2020.
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