Phones 4U is one of the UK’s major multi network retailers. However Phones 4U were plunged further into crisis today as Vodafone announced it would not be renewing it’s contract with them. Meaning customers will not be able to buy Vodafone connections through Phones 4U from February 2015.
Vodafone had already outlined its plans to review all of its working contracts with distributors such as Phones 4U. Putting its attention towards opening another 150 of its own brand stores throughout the UK. Once lengthy talks had taken place with all its retailers, it brought the axe down on its network agreement with Phones 4U. This will halt sales in all of Phones 4U stores from February 2015 with no chance of a reconcile.
If this news wasn’t bad enough for the retailer which was subject to the same action by O2 in January this year, Vodafone will be ‘enhancing’ their relationship with Dixons Carphone, Phones 4U’s biggest competitor. The details of this enhancement are a mystery at the moment.
Smaller distributors are still part of Vodafone’s future as they added to the announcement “We will continue to work with a range of other indirect partners, who represent an important part of our business mix.”
Only EE Remain
Phones 4U Chief David Kessler mirrored exactly the same feeling as he did when O2 pulled sales from the chain. Stating he was “disappointed.” He did add that “following discussions with the network operator it was clear that a renewal was off the table.” He went on to point to Phones 4U’s own brand MVNO, Life Mobile as a way out of the mire. This is an MVNO of P4U’s only remaining network EE.
“We are continuing to set new benchmarks as the leading independent retailer of 4G, with over 70% of connections on this superfast standard.” – David Kessler, CEO Phones 4U.
As much as Phones 4U attempt to band aid the situation, this is a dire situation to be in. Vodafone accounted for 430,000 contract connections and 125,000 prepay connections in the last 12 months to February 2014. Accounting for a massive £212 million worth of sales, a replacement for which is almost impossible.