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Dixons Carphone clings to EE, Three in Phones 4U bullet dodge

Rush of deals will insulate firm from collapse - it hopes

Analysis Electrical retail Goliath Dixons Carphone has announced deals with mobile networks EE and Three to head off the scenario that killed Phones4u.

Phones4U folded when it failed to negotiate contracts to sell mobile network airtime. Dixons Carphone has now announced a multi-year contract with EE and a new range of custom tariffs with Three, which it is targeting at Internet of Things tariffs.

Having run out of people to whom they can sell mobile phones, the mobile industry is very excited at the thought that it can sell contracts to your television, fridge and all your lightbulbs. To do this it has launched an MVNO, as yet unbranded, which will launch in the spring and will have a range of tariffs aimed at what used to be called machine-to-machine.

This, of course, makes sense for the Dixons part of Dixons Carphone, which is much more at home selling things like cameras and televisions. As such devices become “smart” – by which they mean “connected” – they will need contracts.

Graham Stapleton, CEO of Carphone Warehouse UK & Ireland, says: “The announcement of our new network supports our strategic vision to continue to offer customers the widest range of connections, for when they are at home or on the go.”

Three is an interesting choice. It makes sense as the network is optimised for data, yet TalkTalk recently did a deal with Telefonica. Still, it won’t be long before Three and O2 are the same company.

Lynda Burton, director of wholesale at Three, said: “This is our biggest new customer to date and a great opportunity to be the MVNO partner of a large scale brand with real mobile expertise and insight.”

Getting contracts in place is a smart move for Dixons Carphone. With the operators having so much retail space, there is a lot of tension between them and the companies which resell airtime. For example, Tesco has recently announced that its stores-within-a-store Tesco Phone Shops will move from selling the networks' tariffs to just its own Tesco Mobile airtime. ®

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