EE to agree deal to buy Phones 4U's MVNO business

EE is on the verge of agreeing a deal to buy Life Mobile, the mobile virtual network operator (MVNO) business of the now defunct UK mobile phone retailer Phones 4U.

While a deal has not been signed, agreement has been reached in principle and a formal signing should take place once the final details have been worked out according to a person close to the talks. EE was also the network host for Life Mobile, which has continued to operate since Phones 4U went into administration.

The MVNO was originally established in order to allow Phones 4U to expand its business beyond the sale of mobile phones. Life Mobile focused on low-cost mobile contracts and currently has about 85,000 subscribers, according to the Financial Times. The FT added that EE is expected to pay less than £5 million (€6.2 million/$7.9 million) to buy the operations. EE has so far declined to comment on the situation.

The decision by Vodafone UK and EE not to renew their contracts with Phones 4U delivered a fatal blow to the retailer and its Life Mobile business. When the retailer was forced into administration on Sept. 14 under the guidance of PricewaterhouseCoopers (PwC), the two operators accounted for more than 90 per cent of the total connections procured by Phones 4U.

Since then, Vodafone and EE have agreed to buy 198 former Phones 4U stores and 160 concessions between them, saving more than 2,000 jobs.

However, in September PwC said low interest in the sale of the mobile phone retailer's estate means that it is set to close a further 362 shops across the UK with a loss of 1,697 job losses.

Vodafone UK and EE have faced considerable criticism of their role in the collapse of Phones 4U.

EE said in September that the move was in line with its strategy to focus on growth in its direct channels "and to move to fewer, deeper relationships in the indirect channel." The operator also noted that developments in the marketplace "have called into question the long-term viability of the Phones 4U business."

Vodafone UK said earlier in September that it planned to enhance its distribution partnership with Dixons Carphone, the new consumer electrics retailer formed through the recent merger of Carphone Warehouse with Dixons Retail.

For more:
- see this Financial Times article (sub. req.)

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