Vodafone snubs Carphone by sealing exclusive resale deal with Phones4U

16 Oct 2006

Mobile operator Vodafone UK has agreed to make retailer Phones4U its exclusive post-paid services reseller in a direct snub to Phones4U’s high street rival Carphone Warehouse. Vodafone was reportedly worried that users signed up through Carphone were not staying with the network at the end of their initial contract period. A senior industry source told ThisIsMoney.co.uk: ‘The crucial part was customer retention. Carphone’s business depends on signing up new contracts and it is in competition with Vodafone. Arun Sarin, Vodafone’s chief executive, was furious that too many customers signed up at Carphone were switching away from his operation.’ In addition, Vodafone will reportedly pay Phones4U about 20% less commission than the reported GBP400 (USD744) per customer it currently pays Carphone. The move is a blow to Carphone, which is losing the high revenue customers of one of the UK’s largest mobile operators; it will continue to offer Vodafone pre-paid products. The UK’s other mobile operators are watching developments closely, with both Orange and O2 reportedly looking to renegotiate their own retail agreements with Carphone in the wake of Vodafone’s move.

United Kingdom, EE, O2 UK, TalkTalk, Vodafone UK