Efforts to resolve a £120 million legal dispute between Vodafone and over 60 of its former franchise operators have broken down, leaving the high-profile case potentially heading to the High Court.
The legal claim, filed in December, accuses Vodafone of unjustly profiting from a series of cost-cutting measures introduced in 2020, as the UK began to recover from the initial Covid-19 lockdowns. The mobile network giant is alleged to have significantly slashed commission payments to its franchisees, prompting many small business owners to fall into severe personal debt. Some claimants have reported experiencing extreme emotional distress as a result.
A total of 62 franchise operators, representing a significant portion of the roughly 150 who previously worked with Vodafone, have joined the group legal action. They argue that the abrupt reduction in income left them financially vulnerable and, in many cases, fearing the loss of their homes or livelihoods.
Vodafone has acknowledged the impact on the wellbeing of some former partners and expressed regret. The company insists it has responded to raised concerns and maintains that its treatment of franchisees has been fair.
Despite engaging in mediation in an attempt to settle the matter out of court, the parties were unable to reach an agreement. The claimant group expressed deep frustration over the failure of the talks and confirmed their intent to continue seeking justice through legal proceedings. They remain committed to pursuing compensation and accountability on behalf of all affected operators.
Vodafone Group CEO Margherita Della Valle confirmed during the company’s full-year financial results that the dispute remains unresolved despite initial mediation efforts. She emphasised the company’s willingness to continue discussions in pursuit of a resolution.
Vodafone described the case as a complex commercial disagreement between its UK division and a number of franchise partners. The telecoms firm reiterated that it entered mediation in good faith and expressed disappointment at the lack of progress, but it remains open to further negotiation.
The legal battle emerges at a time when Vodafone is undergoing significant changes. The company recently reported a pre-tax loss of €1.5 billion (£1.26 billion), driven largely by non-cash writedowns in its underperforming German and Romanian divisions.
Vodafone is also pressing ahead with its planned merger with rival network Three, which will create the largest mobile operator in the UK. The merger is expected to lead to job losses in areas where the two businesses overlap, but overall employment is forecast to rise as Vodafone launches an €11 billion investment into expanding and upgrading its 5G network over the next decade.
As part of its broader strategy, Vodafone is close to concluding a turnaround plan for its German market, where it lost customers due to changes in pay-TV regulations. The group now aims to accelerate growth as these restructuring efforts draw to a close.
While the recently announced UK-EU trade deal is not expected to directly impact Vodafone’s operations, Della Valle noted that increased cross-border cooperation will benefit infrastructure-heavy sectors such as telecommunications. She highlighted the importance of strong investment, security, and resilience in national telecom networks, and suggested that enhanced UK-EU collaboration will support these objectives.
