PARTNER CHANNEL: Master Agent Celluphone Turns 20

Posted: 7/2003

Master Agent Celluphone Turns 20

Los Angeles-based Celluphone, a
master agent in the wireless industry, has celebrated its 20th anniversary. It
supports about 3,500 independent retailers in eight markets in California, Texas
and Illinois.

To my knowledge, says Celluphone founder
and Chairman Mitch Mohr, only three organizations have operated under the
same name and the same ownership for all 20 years of the industrys history:
Motorola, Audiovox and Celluphone. I think that is some pretty great company.

AT&T Corp.s Advanced Mobile Phone Services
subsidiary (more commonly known as AMPS) and Celluphone signed one of the nations
first wireless sales distribution agreements in May 1983, before the first
cellular network launched commercially. Celluphone has remained an exclusive
agent for Verizon (and it predecessors) for 20 years in Los Angeles.

Initially, Celluphone sold according to the
carrier-suggested model of direct sales and telemarketing. However, Mohr
realized selling and installing phones at about $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 widespread distribution.

Celluphone bet wireless would be an industry that
would last and in 1984 started signing hundreds of small retail subdealers.
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,
son of the founder and now Celluphones president. We chose to put our
efforts into developing and supporting subdealers, in part because we had a
special affinity for them, since we are family run and subdealers 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.

A December 2002 survey of end users, commissioned
by the Consumer Electronics Association, indicated that about 50 percent of
customers purchased their last wireless device through indirect distribution.

Since 2000, Celluphone says its operation has
doubled in size, in terms of activations, personnel and offices. Celluphone now
activates more customers in the first week of every month than it did in its
first three years of operations. In Los Angeles, Celluphone supports its channel
with services: It facilitates postpaid and prepaid activations through a call
center, maintains commission payment systems, produces and distributes point-ofsale
merchandising material, provides training programs and maintains ongoing
relationships with its dealers through a local field sales force. Celluphone
recently launched two proprietary systems: WebActs, an online activation tool,
and EPINs, an Internet and IVR-based system that allows dealers to purchase and
load prepaid wireless airtime without the need to invest in a terminal.

We learned early on that just signing a dealer
to a contract and then merely wishing them well does not work, says Nancy
Mohr, who served as Celluphones first dealer representative. You have to
constantly work with them, understand them, visit them in person, train them,
locally stock inventory, provide a whole bunch of other services and, most
importantly, respect them and what they go through. The result for us has been
not only producing numbers, but producing a steady flow of quality numbers.