Charles Wigoder, Chief Executive of
The Utility Warehouse (Telecom
plus Plc), has today announced news that a long-term management services agreement with npower (one of Europe’s largest utility suppliers) has been implemented.
In a volatile wholsale energy market, where prices have on some days been more than 400% higher than usual levels, resulting financial burdens had been of increasing concern. Charles Wigoder commented that if left unchecked, they would have threatened the future viability of the entire business.
Whilst ensuring that Utility Warehouse Distributors no longer need to worry about wholesale energy prices and maintaining the unique benefits of being Europe's only single billing multi-utility provider, the npower agreement meets three other key objectives:
- Ensuring The Utility Warehouse can continue to provide existing customers with their unique multi-utility proposition, on a single integrated monthly bill.
- Ensuring the continued payment of residual income to Utility Warehouse Distributors on
existing and future energy customers. - The continued offering of the full current range of Utility Warehouse services to new
customers (including the unique "triple value guarantee" for energy).
Whilst this agreement gives npower an option to aquire a 29% shareholding in Telecom plus, Charles Wigoder has also announced new guarantees to protect the long term security of indidual distributor businesses:
- Npower have agreed that if they acquire control, they will not make any changes to the compensation plan which reduces the rates and/or number of levels at which Utility Warehouse distributors are paid residual income, in respect of all customers who are taking our services at that time.
- Our main attraction to npower is the Company's unique business model and Distributor network. Utility Warehouse are a significant sales channel with huge potential for growth. If npower acquire control, while they could decide to review the best way to incentivise and reward the network in respect of new customers gathered after that date, it would clearly not make commercial sense for them to do anything which damaged morale or had the effect of reducing distributor activity.
- The management services agreement with npower is for a minimum of five years. In the unlikely event they decide not to renew it, they will become responsible for billing energy to those customers themselves, but continue to pay Utility Warehouse commission on the
customers energy usage in perpetuity. This ensures the continued payment of residual income to distributors in accordance with the Company's compensation plan.
Overall, the npower agreement has been very well received by existing Utility Warehouse Distributors, with a view being expressed that our partnerships with npower and TMobile offer excellent testimony to the strength of both Telecom plus as a company and business opportunity.
Further Utility Warehouse business opportunity information.
Labels: corporate-news
posted by Jeremy Tromans at 2/16/2006 01:46:00 PM
