British multi-utility brand of Telecom Plus
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]
