Belfast Telegraph

Network 'collusion' is blamed for the collapse of Phones 4u

By Graeme Evans and David Mercer

The founder of Phones 4u has blamed "extremely callous" mobile networks for the collapse of the company, which has put 5,600 jobs at risk.

John Caudwell said the decision of O2, Vodafone and EE not to renew their contracts within six months of each other appeared to be a "co-ordinated attempt to kill off" the retailer.

Phones 4u has 16 stores in Northern Ireland – including four concessions – employing 96 people. All the stores remained closed yesterday.

The entrepreneur, who set up the operation in the 1980s before selling it for £1.5bn in 2006, said he could "guarantee" mobile handset prices would rise rapidly as a result, as administrators began talks on whether any Phones 4u stores can reopen.

Mr Caudwell told Sky News: "What I find appalling is the way this has been done. The way the networks seem to have worked in collusion.

"I'd love to be able to prove that point, because if there was obvious proof of collusion, that'd be extremely worrying."

The collapse of Phones 4u, which has 700 outlets including around 550 standalone stores, follows EE's decision to join Vodafone in cutting ties with the retailer, which sells contracts on behalf of the network operators.

Staff were told to turn up for work on Monday in order to attend briefings with management but the stores remained closed.

Mr Caudwell said he was "sickened and saddened" for the nearly 6,000 staff who work at the Staffordshire-based firm.

"You don't treat a partner that you've been trading with all that time by just completely cutting off the supply instantly and then a few days later, the other supplier cuts it off. That smells of collusion.

"You tell me where else that has ever happened in the last 50 years? I think this is a unique, one-off situation driven by a lack of margin... but driven massively by an attempt to reduce customer competitiveness in the high street.

"I guarantee, without doubt, prices of handsets will go up very quickly after this and who knows what the future is going to be for Carphone (Warehouse)."

He said only the Government could now save Phones 4u.

Vodafone said it rejected any suggestion it behaved inappropriately during its negotiations with Phones 4u and blamed the retailer's debt repayment schedule for hampering progress.

It said: "Phones 4u was offered repeated opportunities to propose competitive distribution terms to enable us to conclude a new agreement, but was unable to do so on terms which were commercially viable for Vodafone in the current UK market conditions.

"We were told by the Phones 4u management team they had little commercial flexibility due to their debt repayment obligations, but that they had a number of alternative strategies in place if we couldn't reach an agreement with them."

Phones 4u said the decision by EE not to renew its current contract, due to end in September next year, came as a "complete shock" and meant it would be left without a single network partner after Vodafone said earlier this month that it would not extend its agreement.

Belfast Telegraph