Vodafone ends three-year exile with Carphone deal

Vodafone, the world's largest mobile phone company, has intensified its efforts to take back its home UK market after ending a three-year exile from Carphone Warehouse stores.

Carphone is set to offer Vodafone's contracts throughout its network of 820 shops from next week, the first time since the operator signed an exclusive deal with Carphone rival Phones4U in October 2006.

Neither company would comment on the agreement yesterday. A Carphone spokesman did say that "the door is always open" for Vodafone.

Vodafone shunned Carphone, the UK's largest independent phone retailer, for Phones4U three years ago in an attempt to shake up mobile distribution practices in the country. At its annual results in May, the group admitted the plan had failed and insiders added it would be open to negotiating a deal with Carphone.

Its new UK boss, Guy Laurence, said the group had struggled in the hugely competitive market in the UK. O2, owned by Telefónica, has the largest market share with 27 per cent, while Vodafone has about 25 per cent.

This comes just days after news emerged of exploratory talks between Vodafone and T-Mobile UK about a potential tie-up. Should Vodafone secure the Deutsche Telekom-owned business it would gain 40 per cent market share in its home territory.

Orange said it was not interested in a counter-bid last night, while a source close to O2 said it was "evaluating options" in light of the news.