BT takes £ 149million to hang up Carphone Warehouse deal
BT took a hit of £ 149million after ending a two-decade relationship with electrical retailer Dixons Carphone.
A disclosure in the carrier’s annual report revealed the cost of the settlement after it chose to end a contract between EE, its mobile division, and Carphone Warehouse last September.
BT said it had resolved all outstanding issues with the retailer, including “revenue sharing costs that might have been accrued previously in the years to come.”
The £ 149million settlement cost consisted of a cash payment made in April and the write-off of prepayments on the balance sheet.
BT said at the time that it had decided to focus on selling EE services online or through its own 575 stores after months of “difficult discussions and negotiations”.
The company’s decision to end the deal came after O2 severed ties with Carphone Warehouse last year.
Tensions between mobile network operators and Dixons Carphone escalated three years ago when chief executive Alex Baldock pushed to renegotiate “unsustainable” contracts.
Carphone Warehouse and Currys PC World were hit with financial penalties as they could no longer meet the strict sales targets agreed to with carriers when they sold more mobile phones.
The retailer of electrical appliances earns a commission for each customer that signs up to a mobile network.
Carphone Warehouse has been a declining force in EE distribution in recent years, losing over 50% to represent less than 15% of new customers and upgrades.