Carphone in Vodafone tie-up

CARPHONE Warehouse said yesterday it will offer contracts from Vodafone from next week in its 820 stores, three years after Vodafone pulled its mobile phone products from the retailer.

Vodafone switched to an exclusive deal with Carphone rival Phones4U in 2006 in the hope it could pay lower sales commissions. The move knocked Carphone’s shares at the time by a sixth.

It regained some contract business a few months after that announcement and Vodafone customers were able to upgrade phones and purchase pay-as-you-go handsets at Carphone Warehouse, but not to sign Vodafone contracts.

“We have always set out our stall to offer the widest possible choice of handsets, networks and tariffs,” said Carphone chief executive Charles Dunstone.

He said: “Our new agreement with Vodafone will bring exciting new products and services to our stores and gives our customers the best possible choice in the marketplace for their communication needs.”

Vodafone also said yesterday it was extending its partnership with Phones4U to a multi-year agreement covering both mobile phone and mobile broadband connections.

The company said it now would have a total of 1,650 Vodafone, Carphone Warehouse and Phones4U stores offering Vodafone contracts.

“It is clear that Vodafone’s withdrawal from Carphone did it no favours,” Citigroup analysts said in a note. “Its UK contract churn of customers leaving is now over 20 per cent. Vodafone needs the help of this independent to drive share of gross connections up and churn down, in our view.”