The deal guarantees Orange at least 25% of all of Phones4U's contract business consistently throughout the two-year period. It also includes a revenue share component, with minimum levels of contracts over £35 a month, and agreed churn levels. The deal was finalised last month as the last major indirect legacy of outgoing UK CEO Bernard Ghillebeart who was replaced by Tom Alexander at the start of the year.
The management of the arrangement has been picked up by recently-installed sales and marketing chief, Jean-Pascal Van Overbeke. Phones4U is believed to have revealed the deal to its private equity parent, Providence equity partners and its banking syndicate in recent weeks. Phones4U now has major long-term deals in place with Vodafone, Orange and what is believed to be a smaller commitment to O2.
Orange now has to deliver a major chunk of its connections to Vodafone and Orange, regardless of how competitive their offers are in the market, and raises new calls about its impartiality in the market - although 25% should not be onerous.
A spokesman for Orange said: ‘Orange is committed to partnering with retailers who demonstrate excellence in their working practices. We have signed a long term strategic agreement with Phones4U in which they will be offering pay monthly contracts to new and existing customers. This agreement is designed to deliver good quality business for both parties whilst ensuring a high-level of customer service.'