Last call? Manchester Arena sponsors Phones 4U plunged into administration

Concertgoers have been reassured gigs will go ahead by Manchester Arena after sponsor Phones 4U announced they have gone into administration – plunging 5,500 jobs into danger.

The mobile firm announced it would be closing all of their 720 outlets today, while it waited for administrators to make a final decision on the company’s future.

The company only took over sponsorship of the arena in July last year and the deal was supposed to stand until 2018.

Phones 4U chief executive David Kassler said: “Today is a very sad day for our customers and our staff.

“If the mobile network operators decline to supply us, we do not have a business. A good company making profits of over £100million, employing thousands of decent people has been forced into administration.

“The great service we have provided should have guaranteed a strong future, but unfortunately our network partners have decided otherwise. The ultimate result will be less competition, less choice and higher prices for mobile customers in the UK.”

The Phones 4U Arena released a statement reassuring those coming to see shows in the future not to be concerned.

They said: “We would like to reassure concertgoers that the future of the mobile phone retailer Phones 4U will have no impact on forthcoming shows. 

“The arena will continue to be managed and operated by SMG Europe, as it has very successfully for the last 20 years. 

“Our name will remain Phones 4U Arena for the forseeable future.”

The companies collapse comes after EE, which accounted for half of Phones 4U’s £1billion sales, cut its ties with the retailer after a strategic review.

Earlier this month Vodafone revealed it would not renew its contract with the retailer that made a quarter of Phones 4U’s sales.

O2, which only accounted for around 10% of sales, also pulled out in February.

EE came to the decision amid concerns that Phones 4U was selling for only one of Britain’s main mobile operators, which reduced its appeal for customers wanting to compare the prices of different operators.

A Phones 4U statement said: “The unexpected decisions by both Vodafone and EE have come as a complete shock to the business.

“The company is in a healthy state and both EE and Vodafone had, until very recently, consistently indicated that they saw Phones 4U as a long-term strategic partner.”

It has been suggested that the retailer may have made a complaint to competition watchdogs, alleging co-operation between mobile operators aimed at reducing competition on the high street to drive up prices.

John Caudwell, the billionaire who founded Phones 4U in 1987 before selling it in 2006 said: “It feels to me as though these networks are acting in unison.

“It’ll be good for the networks ultimately but it can’t be good for the customers, taking all that freedom of choice away.”

Image courtesy of Google Maps, with thanks

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