Utility Warehouse
TypeSubsidiary
IndustryPublic utility, Multi-level marketing
Founded2002
HeadquartersColindale, North London
Key people
Charles Wigoder,
Andrew Lindsay,
Stuart Burnett
Products
ParentTelecom Plus plc
Websiteuw.co.uk Edit this at Wikidata

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 over 949,000 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]

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]

References

  1. ^ a b c Jones, Rupert (7 December 2019). "Utility Warehouse: is its 'life-changing' scheme really ab fab?". TheGuardian.com.
  2. ^ a b "Npower sells some subsidiaries to Telecom Plus for £218m". BBC. 20 November 2013. Retrieved 6 October 2014.
  3. ^ a b c d e 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. ^ a b 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. ^ a b Tieman, Ross (13 March 2009). "Company of the Year: Telecom Plus". Financial Times. Retrieved 6 October 2014.
  8. ^ a b Stafford, Philip (29 March 2009). "Telecom Plus boosted by word-of-mouth support". Financial Times. Retrieved 7 October 2014.
  9. ^ a b c 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. ^ a b Jones, Rupert (8 July 2017). "Get rich quick? Not with Utility Warehouse". the Guardian. Retrieved 18 November 2018.