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Network exodus continues as Vodafone ditches Phones 4u

Alex Yau
September 1, 2014

Vodafone also announces that it will be extending its arrangement with Dixons Carphone

Phones 4u was plunged into crisis after Vodafone opted against renewing its network agreement with the retailer which expires in February.

At the same time, the network operator also announced that it will be “enhancing” its distribution partnership with Dixons Carphone, although refused to elaborate on the specifics of the deal.

“Earlier this year Vodafone UK said it was reviewing its distribution strategies in the UK and that it would be opening a further 150 stores and creating 1,400 new jobs,” said a Vodafone spokesperson.

“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 Phones4U, which expires in February 2015. We will continue to work with a range of other indirect partners, who represent an important part of our business mix.”

Phones 4u chief executive David Kassler said he was “disappinted” at the news and that following discussions with the network operator it was clear that a renewal was off the table. It added that it was in active talks with existing partners, other networks and MVNOs.

It leaves the independent retailer with EE as its only network partner, although it also sells Virgin Mobile tariffs. O2 dropped it in January of this year after claiming it made up just eight per cent of the network’s sales in 2013.

The firm claims to have sold 430,000 Vodafone contract connections and 125,000 prepay SIMs in the 12 months to February 2014. This represented £212 million worth of sales and £18.5 million EBITDA.

Kassler was also keen to point out that its own brand MVNO, LIfe Mobile, which uses the EE network, was now fully road tested and pointed to what it claims is their high market share in the youth market.

“We are continuing to set new benchmarks as the leading independent retailer of 4G, with over 70% of connections on this superfast standard,” he added.

“Both transactions and search traffic through our new mobile commerce site are growing rapidly as customers increasingly look to begin their purchase journey online, and they are continuing to choose to shop with Phones 4u because of the great service and value they get across all channels.

“The independent researcher, YouGov, rated Phones 4u as #1 for iPhone buying experience, which is perfect preparation for the Apple announcements expected this month.”

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