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LONDON -(Dow Jones)- Mobile phone operator O2, a subsidiary of Telefonica, said Thursday that it will stop selling new contracts to potential customers via the UK-based Phones 4u retail chain from April 1
However, a spokesman for O2 told Dow Jones Newswires that it would continue to work with Phones 4u to sell prepay mobile phones and contract upgrades to existing customers.
O2 said the move was part of the company's strategy to sell to customers directly through its own retail outlets. Last year O2 increased its number of retail outlets to 400 from 300, by acquiring full ownership of The Link retail chain, which it already had a large stake in.
Today's news about O2 and Phones 4u lifted shares in rival Carphone Warehouse by almost 4% in early morning trading.
One trader said the news was "very positive" for Carphone Warehouse. "It means that O2 is likely to rely more heavily on Carphone Warehouse for sales," he said. But another trader warned that a pick-up in O2 business at Carphone may well be at the expense of some margin cost for exclusivity.
O2 and Carphone Warehouse renegotiated their own trading terms at the end of last year, following a short period of uncertainty in which it was rumored that O2 might take the same route as Vodafone Group and terminate the contract.
Carphone Warehouse shares dropped dramatically last year after Vodafone said it had signed an exclusive retail deal with Phones 4u and would sever ties with the retailer. The shares subsequently lifted after Carphone said it had maintained both prepay and contract upgrade parts of the business, only losing new contract customers.
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Posted: 2007-03-01 20:57:38
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shame voda are plugging more money into p4u..
they should just get shut down..
p4u is a waste of space!
fatreg
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Posted: 2007-03-01 21:38:54
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