Cellnet model under fire

"IT Wholesale was at the high tide mark for services, but Cellnet has been poor at executing that culture throughout the organisation. They've also got to do a better job of managing their internal systems if they want to gain a competitive advantage."

Ingram Micro managing director, Guy Freeland, said Cellnet's sagging revenue and highly competitive market conditions were forcing the board to act decisively on its future.

"Cellnet has the burden of an investment firm as its largest shareholder [CVC Limited]," he said. "Only time will tell what strategy they take to revive the company, but given they've appointed a numbers man at the helm [Mark Bloomer], it looks like it will be a cost and austerity-led recovery, rather than sales and marketing."

Although its current position was shaky, Dicker's Price argued Cellnet had an advantage in being a large broad-based distributor.

"At the end of the day, they are the second largest distributor in Australia. That in itself gives it an advantage as a logical option to Ingram," he said. "But it all comes back to vendor support." Clairs said Bloomer was now working with Cellnet's key managers on a plan to move forward.

"We have a strong commitment to get this ship sailing correctly," he said.

The Cellnet sales team would report to Bloomer in the short-term. "I just want to get closer to the sales and products teams to see where we are at," he said.

In the meantime, vendors had been supportive of its decision to can the annual Inov8 roadshow, Bloomer said. The event was due to start in Adelaide on June 5. He claimed it had not outlaid any significant sums on the event. "The strong consensus when we discussed it internally and with vendors was that [Inov8] was not the best way to spend our marketing money," he said. "We can do a better job with more focused initiatives that are state driven."

Cellnet partner, Lenovo, was a silver sponsor of Inov8 and had put down $15,000 in marketing collateral for the event. "We were looking forward to it and are disappointed it has been cancelled," spokesperson, Heather Jones, said. "The Cellnet state managers are now tasked with driving more tailored vendor marketing. We have asked for a proposal on how they plan to spend the marketing dollars we provide and hope we will see more targeted activity.

"We'd also like to ensure our full marketing spend is there for future plans."

Lenovo would continue to support Cellnet as a distributor, Jones said.

"The communication so far on the new management structure has been reasonable," she said. "We are looking for more assurances, but the indications so far are that the new structure will be positive.

"At the moment, Cellnet are on track to meet their quarterly targets, and we continue to support them."