Vodafone cans Carphone Warehouse

Voda 4 Phones4U

Vodafone contract phones will soon only be available from Phones4U. The two firms announced an exclusive deal today which will see the operator's contract offerings disappear from the stores of Phones4U's biggest high street rival, Carphone Warehouse.

Vodafone has gradually been taking back control of its contract customers and now has all of them back under its wing. Carphone Warehouse prefers to take over contracts for their duration, acting as a proxy for the networks.

Vodafone UK chief exec Nick Read said: "This strategic deal will complement our significant direct distribution capability and ensure we can target all key customer segments through their channel of choice."

Of particular interest to Vodafone is Phones4U's strength among 16 to 34-year-old consumers. They'll be key if the networks are to achieve their aim of becoming content providers.

Carphone Warehouse responded to being shut out today with a statement: "We do not expect there to be any impact on market forecasts for this or future years as a result of this change in commercial arrangements, as Carphone Warehouse will continue to retain its core customer values of independence and impartiality, and offer customers the most appropriate network proposition."

An "am I bovvered?" retort did little to impress investors, who accordingly sent Carphone Warehouse shares into a nosedive. At time of writing they were down more than 10 per cent on the opening price of 360.25 pence, wiping out gains earlier in the week as the market responded warmly to the acquisition of AOL UK. ®

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