EE “could ditch Carphone Warehouse and Phones4U”

Telecoms

by Michael Moore| 09 June 2014

Operator’s review could affect potential Dixons Carphone merger.

UK operator EE has hinted it could end its operations with two of the country's leading mobile retailers in a move which could cause major effects on the UK mobile market.

The company has said it is currently reviewing its relationship with both Carphone Warehouse and Phones 4U as it look to place more emphasis on direct sales to customers.

"We announced a review of our distribution strategy a few months ago and this process is ongoing, with discussions continuing with all relevant parties, including Carphone Warehouse, who are a long-standing and important partner," EE said in a statement.

The results of the review, which could be revealed "within weeks", could prove damaging to the proposed £3.8bn merger between Carphone Warehouse and electrical retailer Dixons, which was announced last month.

The news prompted many of the UK's major operators to open talks with Carphone Warehouse regarding their potential connections with the company if the merger goes through.

EE, which controls a sizeable part of the UK mobile market, with over 520 stores across the country, and 30m customers, (including 2.9m on its 4G network), is thought to have a contract with Carphone Warehouse until 2016, meaning any potential separation would cause extreme concern amongst the UK mobile and retail markets.

Carphone Warehouse, which currently also provides deals from O2 and Vodafone, moved quickly to assuage doubts regarding an ongoing relationship between the two companies, saying, "We work closely with all the major operators on long-term contracts which align our interests and provide valuable incremental business."

"The proposed merger with Dixons creates the opportunity for significant new value and we're in conversations with all the major operators on how we can mutually make the most of this opportunity."

Any walkout by EE would see it follow in the footsteps of fellow network Three, which pulled out of Carphone Warehouse and Phones4U in 2013, but still boasts 7.9m customers across the UK.

Phones4U, which has over 680 stores across the UK, over 150 of which are in-store at branches of Currys and PC World, could be hit even harder by any decision by EE to go solo, leaving Vodafone as its only major partner operator.

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