O2 drops Phones 4u after poor sales

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Operator pulls business from Phones 4u after it made up just eight per cent of total contract connections at the retailer last year

O2 has dropped Phones 4u as a retail partner in what it claimed is part of a regular review of its distribution mix through indirect partners it works with.

It comes alongside an announcement from Phones 4u that O2 made up just eight per cent of its total contract connections last year. Phones 4u will continue to sell EE, Orange, T-Mobile, Vodafone and Virgin.

The lull in O2 contract connections can be attributed to the operator terminating its agreement with Phones 4u in February to offer subsidies on handsets for new connections.

It meant Phones 4u couldn’t sell O2 contracts with a device as part of a new package.

An O2 spokesman said: “We regularly review our distribution mix through indirect partners that we choose to partner with, complementing our direct channels. After discussions with Phones4U, we can confirm that our trading partnership with them will end on 31 January 2014.”

The news comes as Phones 4U announced that more than half of its contract business now comes from 4G connections.

The retailer has been selling 4G since EE first launched the services in the UK in October 2012. EE now covers 160 towns and cities with 4G and has amassed more than two million customers.

Vodafone launched 4G in the UK on August 29 – the same day as O2. It covers 13 cities across the UK and more than 80 towns and districts in and around London and the South East.

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