Carphone Warehouse has suffered a fresh blow to its restructuring prospects after failing to agree a fresh deal with O2.
It signals the end of a 20-year partnership between the retailer and the operator, and comes as months of negotiations to strike an agreement came to an end yesterday (March 31).
The termination means that O2’s products and tariffs will no longer be on offer to Carphone Warehouse customers online and in Currys PCWorld stores.
It follows Carphone Warehouse’s recent decision to close all 531 standalone stores, with the retailer braced for a £90 million revenue loss this year.
In a statement, a Dixons Carphone spokesperson said: “As part of our strategy we are moving to a new, more flexible and transparent mobile offer that gives better value and choice to our customers.
“This offer is set to launch later this year. While our contract with O2 to sell post-pay has ended today, we continue to offer our customers a wide range of choice through our own Mobile Virtual Network Operator, iD Mobile, and partners EE, Vodafone, Virgin Media and Voxi, including those who currently have an O2 connection.”
While an O2 spokesperson said: “After 20 years of trading, our current consumer contract with Dixons Carphone expired on 31st March 2020. While we’ve worked hard over the past year to put a number of options on the table, it has not been possible to reach a new agreement as they’ve made clear to the market that they wish to take a new strategic direction and change the relationship they had with mobile operators.
“In an uncertain environment, our focus is sharper than ever on the experience we provide to customers. We will continue to make significant investments to provide unbeatable fairness and value through our Custom Plan and Refresh tariffs. And at the present time, we’re adding capacity, boosting network resilience and offering exclusive partnerships like our Disney+ streaming offer.”
CCS Insight director for consumer and connectivity Kester Mann warns this could influence other partnerships being lost.
“The loss of one of its biggest customers is a huge blow to Carphone Warehouse and now raises questions over the retailer’s relationship with its other partners, including EE, Vodafone and Virgin Media.
“The 20-year trading partnership came to an abrupt end after O2 declined to accept revamped terms for a new deal. The break-down appears to be the consequence of a new strategic direction Carphone is taking in mobile, which will see a range of new offers launch later in the year.
“The news comes just days after the embattled retailer announced that it is closing all 531 standalone stores, a decision that cannot have helped the negotiations with O2.”
