MOBILE operator Vodafone says it will not renew its network agreement with retailer Phones4u.

The current tie-up ends in February and Phones4u said it was "surprised and disappointed" by the operator's decision, which will see it enhance its distribution partnership with Dixons Carphone.

The retail chain, which has around 720 UK stores, said the Vodafone deal represented some £212 million of sales and about £18.5m of earnings in the year to July 31.

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Phones4u, owned by private equity firm BC Partners, said it was in discussions with a number of mobile network operators in a bid to to replace the volume of connections it has with Vodafone. But it added there was "no certainty" to the outcome of these talks.