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EE wants to end Carphone Warehouse relationship and go it alone

EE is ready to sever its ties with the UK's two largest mobile phone retailers in a move that could be a blow to one merger and affect the ability for customers to compare mobile phone deals with ease.

Related: Is EE still Britain’s best network after outage problems?

The Telegraph reports the results of a wide-ranging review of EE's retail strategy will be out “within weeks” and it’s almost certain to confirm it will pull out of all Carphone Warehouse stores as well as possibly Phones4u.

It would be a blow to Carphone Warehouse and it’s rumoured that it could scupper a £3.6 billion merger with Dixons due to EE’s position as the largest mobile phone operator in the UK.

EE is yet to make a final decision on whether its relationship with the Carphone Warehouse will come to an end, according to sources quoted by the Telegraph, but two of the three possible scenarios under discussion involve severing that deal.

“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,” read a statement from EE.

It came after comments from Gervais Pellissier, deputy chief executive of Orange, that urged EE to “get rid” of third party retailers, like Carphone Warehouse and Phones4u, to concentrate on direct dealings with consumers.

The same review also covers EE’s relationship with Phones4u and sources added the discussions could see an end to this deal as well as the one with Carphone Warehouse.

EE’s decision to pull out wouldn’t come without its own risks as the Carphone Warehouse has 780 stores and represents the largest high street presence of any mobile phone retailer.

The impact it has on the proposed merger between Dixons and Carphone Warehouse will be realised in July when shareholders of both firms are set to decide and any waivering on Dixons’ side will be an indicator of just how important the EE contract is.