Buyers line up for Phones 4u assets

Buyers line up for Phones 4u assets

EE, Vodafone, O2, Three, Dixons-Carphone, BT and Sky are all tipped to grab a piece of Phones 4u following its collapse into administration this week.
However Phones 4u’s smaller stores remain under threat with potential buyers expected to bid for the retailer’s prime stores.

BC Partners, Phones 4u’s owners, put the business into administration this week after it lost a succession of major trading contracts with O2, Vodafone and EE.

Phones 4u’s administrators are already seeking buyers for the business that has a £1bn annual turnover, over 700 stores, an EE MVNO and 5,596 employees.

Sources close to Dixons-Carphone told Mobile the retailer could look to buy some of Phones 4u’s stores but this is expected to be limited to swapping out Carphone stores for Phones 4u stores which are in superior locations in the same towns.

EE is also eyeing around 80 Phones 4u stores. A source close to EE told Mobile: ‘EE will not buy all of Phones 4u’s estate but it will acquire a few stores, in the tens, not the hundreds and it will keep on all the staff in those stores. It’s expected to be around 80 stores.’

Vodafone is expected to pitch for at least 100 stores, in line with its plans to expand its store portfolio by at least 150. One retailer said: ‘Vodafone has made little headway opening its own stores. Being able to get Phones 4u stores on the cheap is too good an opportunity to ignore.’

BT is also in the frame as a potential buyer as it continues its push into mobile with the launch of its EE MVNO and plans to offer consumer contracts next year. Raising its high street profile is also crucial to the telecoms giant’s move into the quad-play market.

BT’s quad-play rival Sky could also throw its hat in the ring, according to CCS Insight principal analyst Kester Mann. Sky has long been tipped to launch its own MVNO.

Mann said: ‘It will be interesting to see how BT and Sky react to this. BT has made its ambitions in mobile clear and if Sky feels under pressure from BT this may prompt it to also move into the mobile market.’

Dario Talmesio, principal analyst at Ovum, said Phones 4u faces a future similar to The Link, DSGi’s mobile retail and internet operation, which had 295 branches and sales of around £428m. The business was sold to O2, which retained half the stores selling the rest to various buyers including Phones 4u, Orange, T-Mobile and Three in 2006.

Talmesio said: ‘I doubt there will be one buyer for Phones 4u. It will be sold in bits and pieces probably with half of the estate going to mobile operators and some to BT.’


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