EE threatens to end relationship with Carphone Warehouse

EE is poised to pull out of its relationship with Carphone Warehouse in a move that threatens the retailer’s £3.6bn merger with Dixons.

Britain’s largest mobile operator will conclude a review of its consumer retail strategy “within weeks”, sources said, with a complete withdrawal from Carphone Warehouse the potential result.

The move would be a major blow to the retailer, which has positioned itself as the best place for consumers to independently compare deals from mobile operators.

It currently offers handsets and contracts from EE, O2 and Vodafone, but the withdrawal of the biggest of the trio would seriously undermine its claims. EE serves more than 30m customers and has a one-third share of the UK market. It is also recruiting subscribers to its 4G network, who typically require a new handset, faster than O2 and Vodafone.

EE has not made a final decision to end its relationship with Carphone Warehouse, sources said. But it would be the result of two of the three possible scenarios under advanced discussion.

A spokesman for EE said:

“While we do not comment specifically on ongoing negotiations, we can confirm that we’re formally reviewing our distribution strategy, primarily in the consumer space, with a view to fewer, deeper partnerships, based on value and shared ambitions.”

EE’s review also covers its relationship with Phones4U, Carphone Warehouse’s main rival. A source said the mobile operator would end its relationship with one or the other, or both.

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