Phones4U heads into administration, iPhone 6 orders cancelled

Phones4U, a troubled UK mobile phones retailer, has gone into controversial administration resulting in the closure of 550 stores. The company has long had issues after mobile operators dropped support for the business after reportedly being unable to conclude new distribution agreements.

Vodafone said in a statement: “Phones 4U was offered repeated opportunities to propose competitive distribution terms to enable us to conclude a new agreement, but was unable to do so.” Vodafone pulled out a fortnight ago, O2 earlier this year, and network Three some time before that.

EE was the final operator to drop their supply contract with Phones4U due to the potential image problem it could create. If EE was to reach a deal with Phones4U, the network would be the sole operator for which Phones4U would be selling. EE felt this would reduce the appeal for customers who would like to compare the prices of different operators.

The exit of Phones4U in the market leaves Dixons Carphone as (by far) the biggest mobile retailer in the UK. A complaint to competition watchdogs is thought to be in consideration due to the monopoly this creates and the conspiracy that the operators backed out of Phones4U in unison so that there would be less competition on the high street so prices could be increased.

Phones4U staff turned up to their respectful stores today to a notice of closure which gives a list of customer service lines as well as a sign-off which reads: “Thank you for your custom, The heartbroken Phones4u Team.” Dixons Carphone says it will be hiring some of the staff which would otherwise be losing their jobs at their previous rival.

Customers’ existing contracts with Phones4U will continue to be honoured, but devices which have not yet been dispatched – including orders for the new iPhone 6 – will be cancelled as a result of the closure. Employees will also continue to be paid until further notice.

Do you think Phones4U should issue a complaint to watchdogs? Let us know in the comments.

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