Phone giants Phones 4u go into administration

flickr by Sam Leighton

THE high street retailer Phones 4u has been forced into administration after a decision by network operators EE and Vodafone to not renew contracts with the firm.

Five hundred and fifty shops throughout the country have remained closed today, whilst administrators decide whether the business will reopen for trading.

The company said the decision by EE not to renew its current contract, which is due to end in September next year, was a “complete shock” and meant it would be left without a single network partner after Vodafone said earlier this month that it would not extend its agreement.


Despite a healthy balance sheet, the profitable company had no option but to go into administration with a contracted network supplier.

Phones 4u executive David Kassler said: “Today is a very sad day for our customers and our staff. If the mobile network operators decline to supply us, we do not have a business.”

“A good company making profits of over £100m (€125.45m), employing thousands of decent people has been forced into administration.

“The great service we have provided should have guaranteed a strong future, but unfortunately our network partners have decided otherwise. The ultimate result will be less competition, less choice and higher prices for mobile customers in UK.”

Costumers were told that the networks will honour all contracts made through Phones 4u, but orders that had not been dispatched, would not be honoured and refunds will be given to anyone affected.

“Vodafone has acted in exactly the opposite way to what they had consistently indicated to the management of Phones 4u over more than six months,” disclosed Stefano Quadrio Curzio of BC Partners, Phones 4u’s private equity owner. “Their behaviour appears to have been designed to inflict the maximum damage to their partner of 15 years, giving Phones 4u no time to develop commercial alternatives.”

A spokesperson for EE said its decision not to extend its contract with Phones 4u was part of a focus on supplying customers directly and questions surrounding the ‘long-term viability’ of the Phones 4u business.

There are currently 5,596 jobs at risk if the company folds.


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