Carphone Warehouse's Dixons deal under threat as EE considers pullout

Carphone Warehouse's Dixons deal under threat as EE considers pulloutLeading UK network EE is considering severing ties with third party retailer Carphone Warehouse in a move that could threaten the latter's merger with Dixons.

EE is currently reviewing its relationship with partner retailers with the aim of dealing with more customers directly through an increased high street presence.

Carphone announced a deal to join forces with high street electronics powerhouse Dixons last month in a move estimated to be worth around £3.6bn.

The deal was championed as a “merger of equals”, but may be in jeopardy if EE with its 30% UK market share pulls its wares from CPW's shelves. Shareholders are due to vote on the deal in July.

EE has yet to make a final decision, but will reportedly pull its support from Carphone Warehouse, rival Phones4U or potentially both after concluding a review of its consumer retail strategy within the next few weeks according to sources speaking to The Telegraph.

The network is said to be preparing its next move as completes the process of combining the high street operations of Orange and T-Mobile after the two agreed to join forces back in 2010.

“While we do not comment specifically on ongoing negotiations, we can confirm that we’re formally reviewing our distribution strategy, primarily in the consumer space, with a view to fewer, deeper partnerships, based on value and shared ambitions,” an EE spokesman commented.

EE is to open 50 new branches this year to expand its high street presence into new areas and help deal with more of its customers directly.

Rival Vodafone, meanwhile, is expected to open as many as 150 new outlets in 2014.

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