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CPW and Vodafone finally make up

Operator discovers who's wearing the trousers

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Customers wanting a Vodafone contract will be able to get one at Carphone Warehouse from 7 July, signalling the end of a two-an-a-half-year experiment to see how much power network operators actually had.

Vodafone cut Carphone Warehouse out of selling contract connections back in October 2006, claiming that Phones4U had better contacts with the network's target audience - 16 to 34-year-olds - in what was really a flexing of operator muscles that has now ended with the operator effectively conceding defeat.

When the deal was announced it sparked a flurry of speculation about other operators doing the same thing - signing exclusive deals in the hope of more shelf space and greater promotion. Network operators are already courted by handset manufacturers in the hope of decent subsidies, and the idea of having retail outlets fighting for their business must have appealed hugely.

Soon after Vodafone signed the exclusive with Phones4U, rival operator O2 signed an equally exclusive deal with Carphone Warehouse, on a similar basis. That only lasted a year with O2 then claiming that it was always intended to be a temporary move, to avoid signing up too many of the 16 to 34-year-old bracket to attracted to Phones4U stores - apparently.

Vodafone held out longer, but Carphone Warehouse never blinked even if claims that the deal would have no impact of the company's bottom line were met with scepticism by investors. The company just kept selling pre-paid connections to Vodafone, and contracts to everyone else.

And now Vodafone contracts are again on the shelves at Carphone Warehouse, with the operator claiming to have "teamed up" with the retail giant to offer "more choice" to customers; but in reality a power struggle that could have changed the industry has been won by a retail giant. ®

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