BT has agreed to pay £120 million to the administrators of Phones4U to cover commission owed to the defunct retailer for EE contracts it sold before it ceased trading.
Phones4U entered administration in 2014 after EE and Vodafone all declined to renew their contracts, joining O2 and Three, in a bid to boost direct sales. This left Carphone Warehouse as the only major retailer where consumers could sign up for services from all four major operators.
Administrators PwC launched legal proceedings to claim the payments in December 2016, and an agreement was reached last week following the failure of BT’s own £200 million counterclaim that EE suffered significant losses because of Phones4U’s decision to close business before the expiration of their contract.
BT acquired EE for £12.5 billion in 2016. It acknowledged the payment in its full year and quarterly results published last week.
“On 8 May 2018 we reached a confidential agreement with the administrators of P4U to settle this matter,” it said. “This settlement is in line with the accruals we held to cover potential payments required by EE.”
The Telegraph, which first reported the figure involved, claims that PwC is considering separate legal action based on the claim that several mobile operators colluded to force Phones4U out of business. BT has denied such claims.
“Since 2015 the administrators have separately made allegations that EE and other mobile network operators colluded to procure P4U’s insolvency,” it said in its results. “We dispute these allegations vigorously and to date no proceedings have been issued.”
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