It was back in October 2006 that Vodafone in the UK very publicly dropped Carphone Warehouse as a retailer and put all its eggs in the slightly smaller basket of Phones4U. Carphone Warehouse was seen to be too competitive with Vodafone services, but none of the other UK operators followed suit and Vodafone must have been hurt more by the move than Carphone, which has gone from strength to strength.
Today all that is behind the pair of them, and after weakened results for Vodafone it promised that it would rethink its retailer strategy not just here, but in all of its territories. Vodafone said in May that Carphone would be welcomed back and as of July 7 Vodafone contracts will come just as easily from Carphone Warehouse as from Phones4U.
Vodafone will have to do far more and will perhaps have to change some of its bundles and take a leaf out of 3’s book, if it really wants to get back into rapid growth in the UK. In the past financial year its revenues in the UK fell by 1.1% on the back of lost voice customers and its profit fell by 15%, which would have been far worse if it had not been for a £30 million VAT refund. Whereas 3 Group has been the most aggressive operator of late, because it has the smallest customer base and was the first to embrace flat fee broadband and Skype on phones.
The Carphone Warehouse had been allowed to continue to sell pay as you go mobiles on Vodafone and to service existing customers with get upgrades, but it could not sell new pay monthly contracts or mobile broadband until now.
Vodafone naturally says that it has extended its partnership with Phones4U, by which it means, it has signed a new non-exclusive deal, which means Phones4U may not be bound by the same need to get Vodafone 30,000 new customers a month, which was its target on the exclusive deal, but the two together may be more effective than Phones4U on its own.
‘Carphone Warehouse has developed a formidable retail presence on the high street and we’re very pleased to offer our customers even more choice,’ says Ian Shepherd, Consumer Director, Vodafone UK. ‘We’re also delighted with Phones4U’s performance so we’ve extended our partnership into a multi year agreement.’ Vodafone’s reach goes up to 1650 stores in the UK with this deal.