Vodafone UK has shaken things up on the UK mobile phone retail market by dumping Phones 4U as one of its retail partners and instead embracing the newly formed Dixons Carphone retail giant.
Phones 4U said “it has now become apparent” that Vodafone will not renew its network agreement, which is now set to expire in February 2015, adding it “is both surprised and disappointed with this decision.”
The decision by Vodafone means that EE, together with Orange UK and T-Mobile UK, is now the only major network partner left at Phones 4U.
Vodafone UK confirmed the decision, saying the move formed part of a review of its distribution strategies that will also see the operator open a further 150 of its own stores.
“As part of that review, Vodafone today confirms that it will be enhancing its distribution partnership with Dixons Carphone from early next year and will not be extending its existing contract with Phones 4U, which expires in February 2015,” the company added.
Vodafone also noted that it will continue to work with a range of other indirect partners, “who represent an important part of our business mix.”
The move will hit Phones 4U hard. The company said it procured 430,000 postpaid (27% of Phone 4U’s total postpaid connections) and 125,000 prepaid (16% of its total prepaid connections) connections for Vodafone over the 12 months to the end of July. That in turn represented turnover of about £212 million and around £18.5 million in EBITDA.
Phones 4U said it now in talks with other network operators and believes it may be possible to replace the volume of connections it procured for Vodafone with connections for the existing networks offered by Phones 4U - namely EE, Orange, T-Mobile and Virgin Mobile – as well as other network operators, third party MVNOs and its own MVNO (Life Mobile).