Phones4U administrators accuse operators of plot to destroy retailer

(Image credit: Shutterstock / Anton27)

Administrators acting on behalf of Phones4U have accused several of the UK’s leading mobile operators of breaching antitrust legislation, claiming collusion between them led to the demise of the mobile phone retailer in September 2014.

Phones4U generated revenues of £1 billion and a profit of £130 million during 2013, but entered administration just twelve months later after losing supply agreements with all four major operators.

Three withdrew in 2012, and is not a target of the lawsuit, while O2 ended its arrangement in April 2014, followed by EE and Vodafone five months later.

At the time, Phones4U said the latter two terminations were a shock as both companies had indicated they were interested in long-term relationships.

Phones4U claims the three operators were not working independently but engaged in unlawful coordination. Lawyers representing the administrators alleged that the aim was to reduce the volume of business done through Phones4U because of low profit margins in the UK.

Orange and Deutsche Telekom, which joint-owned EE before it was bought by BT for £12.5 billion in 2016, Telefonica, which merged O2 with Virgin Media last year, and Vodafone all deny the allegations.

The closure of Phones4U left Carphone Warehouse as the sole independent mobile phone retailer on the high street. Parent company Curry’s has since closed all of its standalone Carphone Warehouse stores, renegotiated contracts with operators, and increased its online presence to capture more of the market.

Comparison websites have become increasingly common sales channels, while mobile operators have invested significantly in their own physical and online retail operations.

Via FT

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.