Carphone Warehouse seeks European deal with Vodafone

Carphone Warehouse has attempted to soothe fears about the future of its retail business by rebuilding bridges with Vodafone, Europe's largest mobile phone operator.

Vodafone's decision to sign an exclusive agreement to sell its contracts through Phones4U in the UK wiped almost 20 per cent off Carphone's share price in September and raised questions about the viability of independent mobile phone retailers. At that stage the two companies appeared to be at loggerheads.

Yet Carphone has revealed that it is in talks with Vodafone over a fresh pan-European agreement. Roger Taylor, Carphone's finance director, said the rapprochement comes after frank talks between Arun Sarin and Charles Dunstone, the chief executives of Vodafone and Carphone respectively.

He said that no deal has been signed but the two companies are exploring ways to address Vodafone's concerns by better positioning its products within Carphone's stores. He added that he wants to resume selling Vodafone contracts in the key UK market once the mobile phone company's exclusive relationship with Phones4U has lapsed.

"The impression is that our relationship has soured but we are better friends than enemies," he said.

Mr Taylor said that despite losing the right to sell Vodafone contracts in the UK, the company still expects to outperform last year's result over the key Christmas trading period. He said that pre-pay sales are dominant over Christmas and that a range of new handsets, including exclusive designs from Cath Kidston, will drive sales. Last year, Carphone benefited from an exclusive deal to sell pink-coloured Motorola Razr handsets.

Carphone is pinning its hopes on a mass migration of its broadband customers on to its own telecoms equipment to stem mounting losses in the internet market over the next year.

Carphone racked up a near £38m loss on its foray into the broadband market in the first half of the year. The loss offset a strong performance in its core retail division, resulting in a 62 per cent decline in pre-tax profits to £14.1m.

Mr Taylor said: "By midway through 2007, we will have 1 million customers unbundled. No one else will have that."

He reiterated that the company expects to make a profit of between £30m and £40m on its broadband product next year and is adding between 15,000 and 20,000 customers a week.

Carphone has about 2 million broadband customers after it acquired AOL's UK business in September. Yet only 60,000 have been migrated on to its equipment through a process called local loop unbundling. The rest of its customers are connected to BT's network through a wholesale arrangement that costs Carphone about £5 a month for each subscriber.

The company is about a third of the way through its plan to unbundle 1,000 local exchanges by May 2007. It transferred 40,000 of its customers on to those exchanges in October and Mr Taylor said that he expects that rate to double over the coming months.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Call Centre Debt Collector - Multiple Roles

£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Guru Careers: Financial Director / FD / Senior Finance Manager

Up to 70k DOE: Guru Careers: We are seeking an experienced Financial Director ...

Recruitment Genius: Junior / Apprentice Sales Executives - OTE £50,000

£11000 - £50000 per annum: Recruitment Genius: This financial company offer ma...

SThree: Recruitment Consultant

competitive + incentives + uncapped comms: SThree: Did you know? 98% of our di...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen