Phones4U

From the Telegraph

EE, which is understood to account for around half of Phones 4U’s £1bn sales, made its decision after a strategic review. Vodafone, which said it would not renew its contract with the retailer earlier this month made up more than a quarter of sales. O2, which only accounted for around 10pc of sales, pulled out in February.

EE reached the decision amid concerns that Phones 4U was selling for only one of Britain’s main mobile operators. It was felt this reduced its appeal for customers who wanted to compare the prices of different operators.

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BC Partners attacked the mobile operators.

Stefano Quadrio Curzio of the private equity firm said: “Our overriding concern is for all the dedicated hard-working employees of Phones 4U at a time of uncertainty for the company."

"Vodafone has acted in exactly the opposite way to what they had consistently indicated to the management of Phones 4U over more than six months. Their behaviour appears to have been designed to inflict the maximum damage to their partner of 15 years, giving Phones 4U no time to develop commercial alternatives.

What commercial alternative would you develop to having Vodafone? Vodafone, O2, Orange, and EE paid out for the 3G and 4G bandwidth and and each get to use a bit of it for a period of time. There's no alternative because the bandwidth is taken, and you can't create more of it.

David Kassler, chief executive of Phones 4U, said: “Today is a very sad day for our customers and our staff. If the mobile network operators decline to supply us, we do not have a business. A good company making profits of over £100 million, employing thousands of decent people has been forced into administration.

"The great service we have provided should have guaranteed a strong future, but unfortunately our network partners have decided otherwise. The ultimate result will be less competition, less choice and higher prices for mobile customers in UK.”

The operators are seeking to reduce the number of handsets and contracts they sell through third-party retailers, preferring to deal directly with customers and retain more of the profit margin.

Well, precisely. What were Phones4U adding by being a middleman? People often have so much information about phones that they often know what they want before they even walk into the store, especially on high end phones and contracts.

It's also a thing about relationships that these companies learnt from Apple. The Apple stores were not created so much as shops but as showrooms. They were so disappointed with how shops displayed their products and the poor advice that was given and lies customers were told to make a sale that they set up their own shops to show them off properly.

And that seems to be what my local Vodafone shop is like now. They've got the phones out, all working, beautifully displayed with helpful, well-trained, non-pushy staff. They don't care if you buy that day or walk away and buy online from them 2 days later. The bricks-and-mortar thing is more about trying out devices than buying them.