Vodafone hangs up on Phones 4u and ups distribution with Dixons Carphone

The contract between Vodafone and Phones 4u expires in February next year but the mobile operator has opted to up its distribution to the newly merged Dixons Carphone business rather than renew it.

The value of debt in Phones 4u, listed on the Irish stock exchange, fell by about three-quarters on Vodafone’s revelation yesterday.

Vodafone accounts for more than a quarter of contract connections made by Phones 4u in its year to July, generating sales of about £212m.

Three and O2 have already withdrawn its handsets from Phones 4u stores as mobile operators change how they pay commission to third-party retailers that compete with their own stores.

Vodafone had been reviewing its retail business after committing to open a further 150 of its own stores.

Phones 4u, owned by private equity firm BC Partners, said to investors in its debt yesterday that it was “both surprised and disappointed” by Vodafone’s decision and said it was in discussion with other operators to take its place.

Virgin Mobile, a mobile virtual network operator, which means it does not own its own infrastructure, is still available through Phones 4u alongside other similar retail brands.