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
ebooks
ebooksAn introduction to the ground rules of British democracy
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

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones