Currently in the UK, when you want to buy an new contract, you have several options: go to the network you want directly, or use a third party retailer. Phones4U and Carphone Warehouse are two of the biggest and most popular retailers to use, but this could be all about to change.
EE to drop third party retailers?
Within days of Carphone Warehouse and Dixons announcing a £3.6 Billion deal in a merger, there have been suggestions that EE, the UK’s biggest mobile network, could end their partnership in favour of more in-house sales.
The report in the Telegraph suggest that EE could end their relationship with Carphone Warehouse and even Phones4U. This would have two effects: One, customers of both third party retailers would have smaller choice of phones and tariffs. Second, it would mean that EE would have to increase their retail sales in order not to loose out on customers. EE have already said they were going to be increasing their presence on the high street, so this could back up the Telegraph report.
With another UK network, Three, already selling solely from their own shops rather than third party retailers, it could mean that those retailers would lose out to in-house shops. If EE to drop third party retailers, it would require a bug push into their own retail outlets. Since the merger of Orange UK and T-Mobile UK, the joint network have been re-branding stores from their previous designation to EE. It got to the point where some towns had numerous EE shops on the high street (my town, for example, had three; an old Orange shop, an old T-Mobile shop and a ‘new’ EE shop, until recently).
A spokesperson from EE said:
Whilst we cannot discuss open negotiations, we can confirm that we are formally reviewing our distribution strategy.
Add to this the comment made last week by Orange Deputy Chief Executive Gervais Pellissier to “Drop third party retailers and deal with customers directly”, it’s not looking good for Carphone Warehouse or Phones4U.
What this will mean for Carphone Warehouse’s merger with Dixons is anyone’s guess, although we must stress that no final decision has been announced.