Once upon a time, the reasoning in a Wall Street Journal article goes, it made sense for wireless carriers to operate retail stores because not everyone had a mobile phone and the focus was on signing up new subscribers. That reality led to the major cell phone companies opening thousands of retail locations.
Today, however, the focus has shifted on generating more revenues and profits from existing subscribers with added services and faster connections. That change in the market, according to the Journal piece, makes operating stores much less critical than in the past. In fact, with Best Buy (1,000 stores), RadioShack (4,500) and others making big pushes into the wireless business, it might just make more sense for retailers to handle the heavy lifting.
Dan Hays, a partner with consulting firm PRTM, told the Journal that major carriers invest about $500,000 a year to operate each retail store. That, in the case of Verizon, added up to $1.1 billion or 1.7 percent of its revenue last year.
Discussion Questions: Do you think the time is right for wireless carriers to get out of the business of operating retail stores or is there some necessary benefit that would be lost should they follow this course? What do you see as the next big thing in wireless technology and how will it affect retailing of these products?