Yahoo Finance BT hangs up on Dixons Carphone
BT has dealt a blow to Dixons Carphone by calling time on a two-decade old relationship with the electricals retailer.
The telecoms company has opted not to renew the contract between EE, its mobile arm, and Carphone Warehouse when it ends this month, in favour of investing in its own retail empire.
It is another setback for the retailer's mobile phone seller Carphone Warehouse, which was stung by O2's decision not to continue its contract earlier this year.
The move poses questions over Dixons Carphone's existing relationships with mobile operators. Vodafone, Virgin Media and VOXI remain customers, with mobile operator Three underpinning Dixons Carphone's mobile phone service, iD.
In a statement, BT said there had been many months of challenging discussions and negotiations, but it had decided to "reset its distribution strategy and prioritise sales and services" through its own operations.
Dixons Carphone chief executive Alex Baldock risked relationships with the mobile operators two years ago when he pushed to renegotiate "unsustainable" contracts.
Carphone Warehouse and Currys PC World were being hit with financial penalties because they could no longer reach stringent sales targets agreed with operators when they were selling more mobile phones. The electricals retailer earns commission for each customer it signs up to a mobile network.
Dixons Carphone eventually agreed a more favourable deal for the retailer, but Carphone Warehouse continues to struggle. On Thursday, it announced UK and Ireland mobile sales had dropped 56pc for the 17 weeks to the end of August.
A spokesman for Dixons Carphone said: "Our financial plans for mobile and our support for customers currently on an EE connection are unaffected by [the announcement].
"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."
Carphone Warehouse has been a waning force in EE's distribution in recent years, dropping more than 50pc and representing less than 15pc of new customers and upgrades.
Dixons Carphone shut 531 Carphone Warehouse stores in 2020, as it shifted towards selling mobile phones online and through its 305 Currys PC World stores.
Meanwhile, BT has revamped its 575-strong store estate, rebranding its shops BT/EE and introducing help desks and more products.
It is part of a continued push towards convergence under chief executive Philip Jansen, a business model in whicht customers pay one bill for a range of services, such as broadband, mobile phone and live sport.
Investors sent shares in Dixons Carphone down nearly 2pc following the announcement.
It partly unwound gains from Thursday when The City cheered strong online sales and plans to list part of its Nordics business.
