Euphoria over Carphone Warehouse's acquisition of AOL UK yesterday purchase has proved short-lived after Vodafone ditched the retailer as a supplier of its contract phones.
Vodafone's decision to strike an exclusive deal with rival Phones4U came a day after Carphone became the third biggest supplier of broadband internet in the UK following the £370m acquisition of the UK arm of AOL.
Carphone shares were up 9% yesterday, but plunged 13% today as investors digested the surprise blow to its high street retail operation. The move by Vodafone means Phones4U will become the sole third party retailer for its subscription customers in the UK from November 30.
Carphone sought to play down the impact of the contract loss, which it previously held in conjunction with Phones4U and Vodafone's own shops. It insisted losing the rights would not hit its financial performance and pointed out less than 10% of its subscription customers chose Vodafone tariffs.
Vodafone, which boasts 16.2 million customers, said Phones4U was an attractive option as the retailer offered an 'excellent reach' into a younger market. Phones4U plans to open more than 60 new stores in the UK during the next eight months, increasing the number of outlets in the chain to 450.
