Vodafone UK ditches Phones 4u

Vodafone UK has decided against renewing its existing contract with retailer Phones 4u, which ends in February 2015. The news, which sees Phones 4u left with just two operator partners, EE and Virgin, follows Vodafone’s announcement earlier in the year about an overhaul of its UK distribution strategy.

In a statement Vodafone explained: “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. 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. We will continue to work with a range of other indirect partners, who represent an important part of our business mix.”

The news is less than great for Phones 4u, which was also abandoned by O2 in January 2014. The company is looking to replace the lost Vodafone business, which had previously made up over a quarter of its total contract connections, but nothing certain is on the table.

In a statement Phones 4u said: “until February 2015 we will continue to trade as usual with Vodafone. Following that date, we will continue to trade on our existing network brands including EE, T-Mobile, Orange, Virgin Mobile and our own network, LIFE Mobile. In addition to this we are in active discussions with existing partners, other networks and third party MVNO’s to seek to reallocate the Vodafone volume.”

The CEO of Phones 4u, David Kassler insisted the company is still a strong player in the market.  ‘Although we are disappointed with the decision by Vodafone, Phones 4u continues to trade well in the market. We have high levels of market share, especially in the youth segment, and our own network LIFE Mobile (which was launched in 2013) is now fully road-tested and enjoying a great first year with customer growth ahead of our expectations”, he said.

With Dixons Carphone closer than ever to Vodafone, Phones 4u has limited scope to grow its stable of operators. It may therefore become increasingly reliant on LIFE Mobile, which is a new entrant in a crowded UK MVNO market.