Circuit City To Drop T-Mobile In Favor Of VZW

A deal between Verizon Wireless and major US retailer Circuit City will see Circuit City cease to be a retailer of cellular phones themselves, with that department replaced with a ‘store within a store’ owned and operated by VZW. The concept is a strong move for Verizon Wireless with respect to strengthening its retail presence, and a blow to T-Mobile, who loses a major retail channel. And while we think the deal is good business for Circuit City and VZW, we also think consumer choice is likely to suffer. People generally enter a consumer electronics retail store expecting to find a range of choice, and that competition has been compromised. It is possible that Circuit City will see a backlash, as some customers may choose to shop elsewhere in stores with more competitive options, such as Best Buy, which carries Cingular, Sprint PCS, and ATTWS.

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