Vodafone and Phones 4u are pleased to announce a new strategic agreement for the acquisition and retention of contract customers. Under the terms of the deal Phones 4u will be the exclusive third party retailer for Vodafone contract customers on the UK High Street.

Vodafone and Phones 4u have worked closely together for several years to deliver innovative services and excellent value to contract customers. The brands and store propositions complement each other on the high street and this deal is a natural evolution of a close working partnership. Both parties will benefit from supply chain efficiencies and will work together to market mobile products and services.

During the last two years, Vodafone has built up its direct channel capability and taken back the management of existing contract customers to the point of which it now controls 100% of its contract customer base in the UK. In addition, Vodafone is investing GBP 15 million in an award winning retail store optimisation programme, which is already delivering increased customer service levels and loyalty. Vodafone will have optimised 100 stores by April 2007.

Phones 4u is the leading independent contract mobile retailer in the UK. It focuses on offering customers a service and advice based sales approach for all network operators. In particular, the company has an excellent reach in the 16-34 year old market. It currently operates from 384 sites in the UK and has plans to expand to 450 by mid 2007.

Nick Read, Chief Executive, Vodafone UK, said:
"Phones 4u is fully aligned with the Vodafone strategy of delivering a superior customer experience. The combination of Phones 4u's experience and Vodafone's flexible product offering creates an exciting proposition. This strategic deal will complement our significant direct distribution capability and ensure we can target all key customer segments through their channel of choice."

Tim Whiting, Chief Executive, Phones 4u Group, said:
"Vodafone has built a leading mobile brand by delivering an excellent customer experience of network, product and service quality. I am delighted to announce this deal because it will ensure we can continue to offer exceptional value and choice to our customers as well as our network partners. Phones 4u and Vodafone are complementary businesses and are determined to work together to deliver excellent service to our customers."

For further information please contact:

Vodafone UK Press Office
Tel: 08454 444466

Phones 4u Press Office
Tel: 01782 677293
Tel: 07766 883388
E-mail: pressoffice@phones4u.co.uk

About Vodafone UK
Vodafone UK has 16.2 million customers and offers a wide range of voice and data communications. The company is committed to providing mobile solutions that allow both consumer and business customers to make the most of now. In addition, Vodafone connects customers across the globe with roaming agreements worldwide. It provides 3G roaming in 18 countries and offers great roaming value with Vodafone Passport. In June 2006 Vodafone UK was the first UK mobile network to launch a 3G broadband (HSDPA) service, available in London, Greater Manchester, Sheffield, Glasgow, Tyneside, the West Midlands, Bristol and Liverpool. For more information, please visit www.vodafone.co.uk.

About Phones 4u
Phones 4u is the independent mobile phone retailer offering consumers all major handset brands and network services in the UK. They understand the confusion felt by many customers when choosing a new mobile contract, therefore take time to understand exactly what you need, before finding the deal that's right for you. Phones 4u came top in the two most recent JD Power surveys for customer satisfaction in the independent mobile phone sector (J.D. Power and Associates United Kingdom Mobile Phones Retailer Customer Satisfaction Study 2005. Based on a total of 2258 consumer responses). For more information, please visit www.phones4u.co.uk.