Carphone Warehouse on track for unbundling target

Carphone Warehouse has acknowledged that movement on unbundling had been slower than expected

Carphone Warehouse claims to be on target to reach the figure of 1,000 unbundled local telephone exchanges by May 2007, despite having only a third completed so far. 

The mobile phone retailer, which has added mobile, fixed-line and internet services to its portfolio, said that it had 60,000 customers on unbundled lines at 31 October.

However, at the company's half yearly results announcement, chief executive Charles Dunstone acknowledged that movement on unbundling had been slower than expected.

"As previously announced, start-up costs this year will be greater than planned, owing to the strength of demand and delays in the rate at which customers are migrated onto unbundled lines," he said.

Despite this, Dunstone believes that the company's broadband business will be a significant driver of future profitability.

"Our immediate goals in broadband are to raise the rate at which we migrate customers onto unbundled lines, subject to the quality and reliability of BT Openreach processes, and to begin the integration of the AOL acquisition, following its expected completion later this year," he said. 

Carphone Warehouse maintained that the launch of its free broadband service and acquisition of AOL's UK business had boosted TalkTalk to become the third largest provider of voice calls and broadband in the UK. 

"Crucial to our future success in this area, the evolution of Opal into an all-IP next-generation network is well on track," said Dunstone.

He added that the Opal network had performed well for its fixed-line operation and that the improved network would help Carphone Warehouse's ongoing development of data services to the SME market.

The company also commented on its plans with mobile operator Vodafone. 

"Subsequent to its announcement on 12 October, we have been actively engaged with Vodafone regarding the development of a pan-European framework agreement," said Dunstone.

"It is intended that this agreement will encompass subscription and pre-pay connections, where appropriate."

Carphone Warehouse posted group revenues of £1.8bn compared with £1.29bn for the previous year, a rise of 40.2 per cent.

Pre-tax profits before acquisitions rose 60.1 per cent to £59.3m before start-up losses of £45.1m in relation to the TalkTalk free broadband launch and Virgin Mobile France.