It appears that the rumours are true, carphone warehouse has been taken back into the fold by Vodafone now that it has abandoned an exclusive three-year deal that it had with phones4U. The move is believed to be due to how competitive the UK mobile phone market has become. Very similar to the mobile phone recycling market I’m guessing.

At some point this week the biggest independent handset retailer in the UK is expected to announce to all of its staff that relations between the carphone warehouse and Vodafone, the UK’s second-largest mobile phone network, have well and truly thawed. This means that any customers going into any of its 820 shops will now be offered the choice of signing up to Vodafone mobile phone contracts.

Back in October 2006 following the announcement by Vodafone that it would only sell its monthly contracts through phones4u, the shares in carphone warehouse took a massive dive. The UK mobile phone market has more independent mobile phone shops than any other European markets, and the Vodafone were trying to force any restructuring in the wholesale UK market by only partnering with one independent; sadly this strategy does not appear to have worked.

Rumours have been around that in both the Vodafone and carphone warehouse have been discussing working together again for a number of months now. The mobile phone network are hoping that by allowing carphone warehouse to promote their contract mobile phones, will help to improve their market share in the UK market, against companies like O2.

Phones4U will be upset that their exclusive deal has come to an end, especially as they appear to be suffering from the tough economic climate on the UK high street. In addition they face very stiff competition from the mobile network’s own stores as well as other major independence like the carphone warehouse.