“There’s a lot of ruthlessness being applied and if the public actually felt strongly enough they know what they could do, they could vote with their feet and move their business to other networks.”
Vodafone’s decision came months after O2 also pulled out, leaving Phones 4U
in business with only one of Britain’s four major operators, EE. It wiped off three quarters of the value of more than £200m in bonds issued by the retailer last year and saw ratings agencies downgrade the debt.
BC Partners, Phones 4U’s private equity owners, had been in discussion towards a stock market flotation as recently as January but now face a challenge to rescue the business.
Sir John said: “I don’t believe it can be rescued without one of the networks coming back to the table. Unless the government steps in we’ll be witnessing what was a phenomenal business destroyed by very ruthless behaviour.
“It seems a shame that a business I spent 20 years of my life growing looks like it could come to such a sticky end.”
Phones 4U has been the highest-profile victim of an industry trend. All the major mobile operators have been aiming to reduce the volume of handsets they sell through third parties in favour of dealing direct with customers to preserve profit margins that have been hit by regulation on call pricing and international roaming.
Sir John, who now invests in property, said: “I fully respect Vodafone’s right to act whichever way they want to for their own best commercial interests, which is fully in line with free enterprise and trying to maximise their shareholder value.
“But I don’t think I could have ever behaved like that in Vodafone’s place. Business should have a bit of a heart. It isn’t just the bottom line at all costs.”
He also criticised BC Partners’s decision to pay itself a £200m special dividend from last year’s bond placing, saying he “did agree with healthly business being stripped an debt laden”.
BC Partners and Vodafone both declined to comment. EE is conducting a review of its own third-party retail relationships.
more
{ 0 comments... » Phones 4U founder attacks Vodafone read them below or add one }
Post a Comment