EE’s UK team approved a three year deal with Phones 4u earlier this year but the deal was rejected six times by the company’s board, triggering the collapse of the mobile retailer, a high level source close to the negotiations told Mobile.
The EE board is made up of a mix of directors from EE's French and German owners, Orange and Deutsche Telekom, and UK management. It includes Gervaise Pellissier, deputy chief executive of Orange, who earlier this year was quoted as saying he wanted EE to 'get rid' of its third party retailers.
Phones 4u collapsed shortly after EE pulled out of its trading agreement earlier this month, resulting in the closure of over 500 stores and hundreds of redundancies. EE's withdrawal from the retailer closely followed Vodafone's decision to pull out of Phones 4u.
The source told Mobile that EE’s UK team had approved a deal in the early summer with Phones 4u and was keen to get sign off. He said the UK management team went on repeated occasions to the board of EE, which is made up of EE CEO Olaf Swantee, EE CFO Neil Milsom, Orange deputy CEO Gervaise Pellissier, Deutsche Telekom finance board member Thomas Dannenfeldt, Orange EVP Europe Benoit Scheen and Michael Tsamaz, CEO of OTE Group, a Deutsche Telekom subsidiary.
The source said: ‘A deal was agreed with the UK management team but they couldn’t get (the EE board members) in France to agree it. They took it to the board on five or six occasions to get approval and the board kept saying they needed more time.’
Asked why the board repeatedly refused to sign off the deal the source said: ‘They said there were new people who had joined the board who needed more time to understand the UK market better. Then the next thing was the deal was off the table.'
The claim follows reports that EE was forced to walk away from the negotiations on 31 July after Phones 4u refused to lower its commissions but the source strongly refuted these claims.
He said: ‘Never, ever did they say the commercial terms were unacceptable and that is a key point here. This was a decision taken in France.'