Missed opportunity to specialise in MVNOs?
I daresay there's some key point I'm overlooking, but it strikes me that Phones4U could take this as an opportunity to try to get into bed with the MVNOs like Virgin, Tesco Mobile, Giffgaff, etc. and provide a one-stop shop where people can compare the various MVNO contracts and buy unlocked handsets. I know that the general public is still betwitched by the chimaera of the "free" phone, but maybe Phones4U could either team up with the MVNOs to offer subsidised handsets, or develop their own payment-by-instalments system.
It would also be advantageous for the companies concerned, given that your average punter knows next to nothing about Giffgaff or Tesco Mobile and would probably steer clear of them purely on the basis that they're an unknown quantity. If a well-known high street chain started promoting their tariffs and contracts, and (most importantly) explained to people that they actually use the same infrastructure as one of the Big Four, I'm sure a lot of people would be persuaded to give them a whirl, especially if they signed up to a rolling monthly contract where they can get out if they're not happy.