Challenger Mobile Communications set for growth

Investment Executive
Challenger Comms

Business to business (b2b) telecoms provider Challenger Mobile Communications is targeting growth after a management succession buyout supported by a £1.4m loan from the Development Bank of Wales.

The communications specialist has been supplying mobile phone solutions to businesses since it was established by co-founders Jeff Eamens and Wayne Skellon in 1991. This latest development sees Jeff buy out his former business partner to take on sole ownership of the company.

Jeff has been working in telecoms since the mid-1980s, initially running a network of shops. When the market changed and Pay As You Go phones took off in the mid-1990s, Challenger decided to sell the shops and concentrate on the b2b market.

Challenger, which is based at Deeside Industrial Park in Flintshire, currently has a turnover of almost £8m a year and is aiming to grow that by 25% to £10m within the next two to three years.

Mobile phone solutions for businesses represent around 65% of Challenger’s turnover, but the company also provides a range of other services, including hosted products, vehicle tracking and lone worker protection, voice telephony and other data products.

It is part of the O2 Direct Partner Network and is among the top five O2 dealers in the UK with customers across the country.

Currently, the company is recruiting for an extra two on-the-road sales staff as it seeks to expand its reach. 60 members of staff work at Challenger, most of whom are based at the Deeside office.

Jeff explains that what sets Challenger apart is their focus on the customer’s needs:

“People like to have the latest iPhone or Samsung, so they will be looking to renegotiate their contract so they can get the latest piece of equipment.

“It’s a competitive market, but everybody’s going to change their devices and the key to it is adding value, so we need to do things that other people don’t do and that’s putting the customer first.”

 “Every time we do a transaction the customer has to benefit from it. They get more value, added services,” he said.

“We do what we call proactive account management whereby we tell the customer how to save money. We may make less money on the account in the short term, but we’re likely to keep the customer for longer.

Using this business model has ensured most of their customers are retained for around 14 years, with some that have stayed with them since establishing Challenger.

Chris Hayward, Investment Executive at the Development Bank of Wales said: “We are pleased to support a well-established business demonstrating continuous growth such as Challenger Comms in an MBO transaction.

“They provide a valuable service in an increasingly competitive market and put their customers’ best interests at the heart of their business, which has proven to be an effective business model over the years.

“We welcome all enquiries from anyone considering buying a business and encourage those interested to get in touch with us through our website.”

The following advisers were involved in the transaction on behalf of all parties; corporate advisors MC Vanguard, solicitors; Jolliffe & Co on behalf of Jeff Eamens, Blake Morgan on behalf of the Development Bank of Wales and Storrar Cowdry on behalf of Wayne Skellon. 

The investment has come from the Wales Business Fund which was set up to support businesses with fewer than 250 employees, based in Wales or willing to move here.

It is designed to provide business loans and equity packages from £50,000 up to £2million, and backs start-ups, established small and medium-sized businesses and early stage tech ventures across a wide range of sectors.

It provides both short-term project finance and longer-term growth finance, as well as follow-on investment and additional working capital.