Vodafone has entered a conditional agreement to buy one of its two retail partners, First Mobile. The chain operates 77 stores around New Zealand.

The deal will see First Mobile become a wholly-owned subsidiary of Vodafone.

Thirty two of the First Mobile stores will be directly run by Vodafone; the remaining 45 will remain managed by franchisees.

A Vodafone spokesman told NBR that Vodafone had not gone looking for a deal. Instead, the opportunity arose to buy First Mobile, and the telco took it.

Vodafone already owns 25% of its second major retail partner, DigiMobile.

Telecom and 2degrees are already on a push to broaden their presence (see below).

Now, as the retail war expands, Vodafone will now have a bit more control over its front line. 

"Both telcos are challenged to support with lower margins and poor cust service levels and conversion rates", a recently departed Telecom manager told NBR this morning. "Taking [direct] ownership is the short term answer - maybe."

Hewitt returns
Russell Hewitt - once HP's New Zealand country manager, and recently chief executive of Vodafone Australia - will oversee the retail chain's transition in his new role of First Mobile executive chairman.

Mr Hewitt (pictured), one of the biggest personalities on the local scene during his time running HP, moved to a boardroom-only role after Vodafone Australia merged with Hutchison in June last year.

Doth protest ...
The takeover "won’t be rushing to rationalise store numbers or reduce head count," said Vodafone’s director of sales, Grant Hopkins.

“At this stage I see no need to do that. We want our retail staff focused on the job of looking after our customers and offering them the best service we can. This move isn’t about reducing cost, it’s about adding capability."

All players expanding retail
Today's development comes on the heels of 2degrees' recent move to lease space and recruit owner-operators ahead of a retail launch later this year.

Telecom - which had a major retail makeover last year as it launched XT - has recently opened four stores, taking its total of directly owned outlets to 32. The telco also has 86 partner stores through Orb and Leading Edge, five kiosks in high-traffic malls.

Ahead of the First Mobile deal, Vodafone owned 18 stores, with the balance of tis 130 branded outlets run by DigiMobile and First Mobile. Both telcos also sell through multi-channel retail partners.