The Carphone Warehouse has received a huge response to its offer of free broadband through its TalkTalk service, with initial demand significantly ahead of forecasts, reveals the group’s preliminary results for the year ending April 1 2006.
According to Charles Dunstone, the chief executive officer of The Carphone Warehouse, it has connected more customers in the first eight weeks than it had planned to do in the first four months.
As of June 5, 340,000 customers have signed up for the Free Broadband Forever service, with 100,000 customers having gone live on free broadband.
Mr Dunstone said: “We continue to expand our capacity to handle the larger than expected customer base and our service levels are showing steady improvement week by week. When combined with our 2.6m TalkTalk voice customers, our impact and influence on the UK residential telecoms market is becoming considerable.
“Our aim was to change the UK broadband market forever, and there is no doubt that we are well on the way to achieving this.”
Overall, group revenue for the 52 weeks to 1 April 2006 was £3,046.4m compared with £2,355.1 million for the prior year, representing growth of 29.4%.
Mr Dunstone went on to say: “We are making a substantial investment during the current year to support our free broadband proposition, with a £50 million total operating loss from this project expected. We are confident that this investment will create substantial value in the medium term and are provisionally estimating incremental profit from our unbundled broadband service of £30-40 million in the year to March 2008, with full payback on the cash investment within four years.
“For the current year, our investments in broadband and Virgin Mobile France will impact group profit significantly, although the strength of our confidence in our future prospects means we intend growing dividends in line with underlying Group earnings growth.”
A report in today’s Times claimed that The Carphone Warehouse is on the verge of bidding for the British arm of AOL valued at £1 billion, which with 2.2 million customers is the UK’s third biggest internet service provider.
Related Links
