EE withdraws from Carphone Warehouse partnership

(Image credit: Dixons Carphone)

EE is severing ties with Dixons Carphone, becoming the latest mobile operator to withdraw its tariffs from the retailer.

In a statement, EE said that it had not been an easy decision to make and followed “many months of challenging discussions and negotiation.”

“After more than 20 years of close partnership, we have taken the hard decision to not renew our EE Mobile contract with Dixons Carphone, and shift our focus and investment to growth in our own stores and online channels,” said a BT spokesperson.

“However, as our strategy moves toward convergence and our focus on customer value and retention increases, we will be resetting our distribution strategy to prioritise sales and service in our own channels.

“Dixons Carphone has been a great partner for many years, and we thank the team for all the work they have done with us helping to grow our business, and wish them well as they pursue their own renewed strategy. Customers will not be affected by this change.”

EE Carphone Warehouse

The end of EE’s contract means three of the big four mobile operators no longer have a relationship with the UK’s biggest mobile phone retailer. Three parted ways several years ago while O2 failed to agree an extension to its contract earlier this year.

This exodus can partly be explained by increased operator investments in high street and online retail presences but also because of Dixons Carphone’s desire to change the terms of its contracts amid a wider transformation programme. Upon his appointment in 2018, CEO Alex Baldock declared the existing relationships with EE, O2 and Vodafone as “unsustainable.”

A major issue for Dixons Carphone has been changing consumer habits. A saturated market and longer refresh cycles are lowering contract renewal rates, making SIM-only tariffs and SIM-free handsets more popular, squeezing margins.

As well as “resetting” the company’s relationships with operators, the company is improving its technological capabilities, training staff, and plans to offer credit services in a bid to revitalise its mobile business and drive online sales. To this end it closed all 531 standalone Carphone Warehouse stores in the UK prior to lockdown.

EE’s departure leaves Vodafone, Voxi and Virgin Media as Dixons Carphone’s remaining network partners, while the company also has its own ‘iD’ Mobile Virtual Network Operator (MVNO), powered by Three’s infrastructure.

However Dixons Carphone believes the market is shifting away from lengthy contracts that tie airtime to specific devices. It is planning a new mobile proposition but has yet to provide many details.

“EE and Dixons Carphone have enjoyed a strong working relationship for over two decades,” a Dixons Carphone spokesperson told TechRadar Pro. “However, after lengthy discussions we have agreed that our contract with EE to sell pre and post-pay will come to an end this month.

“Our financial plans for mobile and our support for customers currently on an EE connection are unaffected by today’s news. We are well underway with our strategy of moving to a new, more flexible and transparent mobile offer that gives better value to our customers, and this offer is set to launch early next year. We will continue to provide our customers with a broad range of connectivity options."

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.