Vodafone UK is to withdraw its products from the stores of Phones 4U, meaning the British retailer will lose a significant portion of its sales next year.
From February 2015, EE will be the only UK mobile network operator that offers its devices through Phones 4U, and the UK number one operator is also understood to be reviewing its contract, according to a Financial Times report.
O2 and 3 UK previously announced plans to withdraw their devices from Phones 4U as part of a shift in how operators pay commission to third-party retailers that compete with their own branded stores.
Phones 4U does, however, have its own Life Mobile brand (launched in 2013), along with a number of other MVNO players, including Virgin Mobile.
Vodafone accounted for 27 per cent (430,000) of Phone 4U’s postpay connections and 16 per cent (125,000) of prepay connections in the year ending 31 July. This was equivalent to £212 million in turnover and £18.5 million in EBITDA.
Phones 4U said in an update to investors that it was in discussion with other mobile network operators to take Vodafone’s place.
Phones 4U, which is controlled by private equity group BC Partners, saw the value of its debt fall by 75 per cent following the announcement.
The move coincides with Vodafone agreeing an enhanced distribution partnership with Dixons Carphone, the new company formed via the internet-of-things-inspired merger of Dixons and Carphone Warehouse.