[3GScottishUser]

O2 is to pull out of new contract business at Phones 4u from 1 April.

Mobile has learned that O2 will only allow upgrade business and prepay sales at the multiple retailer, in a move that completes the strategic alignment of Vodafone and O2 with two separate retailers.

O2's retreat from Phones 4u follows Vodafone's shock pull-out from The Carphone Warehouse last year. The deal is the latest example of operators and retailers taking sides, forging alignments and operators striking sharper deals.

O2's move follows a renewal of its deal with Carphone, under which it is believed smaller commissions will be given for larger volumes.

Sources suggest Phones 4u's O2 contract connections have fallen from around 15,000 to 5,000 a month.

An O2 spokesman said: 'We don't discuss the commercial terms of our relationships with our indirect partners. We have already said that we expect to do less overall gross connections with independent retailers as we increase our focus on our direct channels. Generally, we continue to work with indirect partners who share our ethos of delivering the best possible customer experience and who can add value.'

Jim Slater, marketing director at Phones 4u said, 'Phones 4u is in ongoing commercial discussions with O2, and as with all of our strategic business partners, these are confidential.'

http://www.mobiletoday.co.uk/content/15770.asp?men=0&sub=1

[3GScottishUser]

Vodafone rushed in to congratulate O2 on its move, describing it as a means to 'optimise their supply chain'.

Vodafone claimed credit for setting the wheels in motion as it moved to shift the power retailers to the operators. Vodafone's shock decision to dump The Carphone Warehouse as a contract partner in October is believed to have emboldened O2.

Vodafone's commercial director, Ian Shepherd, told Mobile: 'We're not surprised to see others change their distribution strategies as they also seek to optimise their supply chain, following the lead we set six months ago.'

The network has become the prime network partner at Phones 4u in recent months, while rival Carphone's contract connections have been dominated by O2. Both deals have been interpreted as a means to erode the power and consequently the impartiality of so-called independent retailers.

Nick Read, Vodafone's UK chief, has previously said all operators are under pressure to cut costs and cut churn as the market matures.

http://www.mobiletoday.co.uk/content/15780.asp?men=1&sub=6

[Ben]

Feels a bit like the beginning of the end ;) The whole point of these shops, CPW, P4U etc, is to offer a broad choice to the consumer and recommend the best option for each customers needs.

Of course, that's not what they actually do - they sell the best commission-paying tariff to anyone who they can convince to take it, even if that means telling them they can downgrade their tariff in x months. So really there's no loss here.

However, once the buying public realise that these stores are so obviously biased now, why wont they just go direct?

[Hands0n]

Direct also offer some substantial benefits in terms of tariffs not available from either the MNOs own stores or high street retailers!