Mobile phone operator to challenge Carphone Warehouse
O2 is to open franchise stores in a bid to significantly bolster its presence in the UK to fight harder against rivals such as Carphone Warehouse.

The mobile phone operator is to open 10 franchise stores before Christmas and will assess their performance before embarking on an aggressive expansion plan next year.

Although the company would not commit to how may franchise stores it will have in the UK, it has more than 300 in Germany, indicating the growth opportunity.

O2 UK sales director Mark Stansfeld said the initiative will enable independent businesses to benefit from the strength of the O2 brand.

The franchise venture will be combined with company-owned store growth. O2 has 272 shops at present, but will hit the 300 mark by March and plans to open at least another 40 outlets next year.

The hunt for quality sites by mobile phone retailers is hotting up. Carphone Warehouse hopes to open 100 stores in the next year. Network operator 3 also plans to build a national retail chain, opening 20 stores before Christmas (Retail Week, July 15).

The mobile market is one of the most competitive sectors in retail. Earlier this week, Dixons' The Link chain revealed like-for-like sales were down 28 per cent in the 16 weeks to August 20.