RadioShack dumps T-Mobile for Verizon Wireless

You won't find T-Mobile products in the RadioShack aisles as of September 15

RadioShack announced that it plans to stop selling mobile handsets and wireless service plans from T-Mobile USA effective September 14, a move that comes as the electronics retailer enters into an agreement with T-Mobile rival Verizon Wireless.

That partnership kicks off on September 15th, at which time RadioShack will begin selling top-selling handsets from Verizon at more than 4,300 U.S. company-operated stores and through RadioShack.com.

The Wall Street Journal reports that the partnership between RadioShack and T-Mobile had been strained. In April, RadioShack accused the fourth largest wireless carrier in the country of breaching its contract. And, earlier this year, RadioShack claimed that T-Mobile’s products weren’t competitive, one of the reasons why the company’s quarterly earnings fell at the time.

In trading today, shares of RadioShack soared 19 percent on the news.

“This is a substantial win for our customers, as this relationship with the nation’s largest wireless provider will further enhance our position as a leading multi-carrier wireless retailer,” said Jim Gooch, president and chief executive officer of RadioShack. “The addition of Verizon Wireless, in combination with our existing carrier partners, positions us to now offer the best assortment of carriers, rate plans, devices and accessories for every consumer need.”

T-Mobile issued a short statement on its Web site. It read:

After careful consideration, we decided that in order to increase the effectiveness of our retail network and in line with our sales strategy, T-Mobile will exit RadioShack retail locations, effective September 15, 2011. We are currently focused on higher-return national retailer opportunities and we expect to announce new channel growth in the coming weeks, which will more than double the number of RadioShack doors currently offering T-Mobile products and services.

Forth Worth, Texas-based RadioShack also posted earnings for the second quarter, showing revenue of $941.9 million and net income of $24.9 million (which included a $3 million charge related to phasing out T-Mobile inventory).

AT&T, which remains a RadioShack partner, has announced its intention to buy Bellevue-based T-Mobile for $39 billion. The deal still faces regulatory approval.

  • Guest

    “Bellevue-based T-Mobile is in the process of being acquired by AT&T, which remains a RadioShack partner.”

    That’s not quite true. The acquisition has not been approved yet and TMobile and ATT are still entirely separate companies. No acquisition process is happening.

    And hopefully no acquisition will happen but that’s another story.

    • johnhcook

      AT&T started a process of buying T-Mobile when it announced its bid earlier this year. I did not say that the deal is done or that it has been approved, but I did rephrase the sentence to make it clear above that it is a proposed offer and still faces regulatory hurdles.