Retail contract goes to rival Phones4U
Mobile phone giant Vodafone has ditched Carphone Warehouse in favour of rival Phones4U, which will be the exclusive retailer of it's mobile phone contracts.

Vodafone hopes to pay lower sales commission as a result of the move, which is expected to be completed by the end of next month.

A Vodafone spokesman told Reuters: 'Commissions will come back down to where they were last year.'

Carphone Warehouse - which yesterday revealed that it was to pay£370 million for the UK internet business of AOL - declined to comment on the value of its Vodafone contract business, but reports estimated it at around£100 million.

It also emerged today that Vodafone was in talks with Carphone Warehouse over the future of their relationship in prepaid connections as well.

The deal will strengthen Phones4U's plans to expand from 384 stores to 450 by the middle of next year.

The move also marks the culmination of Vodafone's recent strategy to ensure that it has direct control of all of the contracts of its UK customers.

Phones4U chief executive Tim Whiting said: 'I am delighted to announce this deal, because it will ensure we can continue -to offer excellent service to our customers.'

Carphone Warehouse shares had fallen 13 per cent to 312.25p by lunchtime trading.