Although this brings Carphone Warehouse’s total broadband base to 2.7 million subscribers, the figure was short of analysts’ expectations of 128,000 and combined with a high spending forecast, shares fell by eight per cent.
However, Charles Dunstone, chief executive officer, praised the company’s growth in harder times. “Our performance over the last three months has been good in a slower consumer environment,” he said.
It reported that 1.8 million customers are now on its local loop unbundled (LLU) network - a total of 67 per cent of its base - with 1,619 TalkTalk exchanges unbundled and 1,011 AOL exchanges unbundled.
Moving customers away from BT's (www.BT.com) network and onto its own cheaper LLU service increases profits and allows companies to reduce headline rates. It plans to unbundle a further 400 exchanges this year for TalkTalk and 200 for AOL.
Dunstone said: “In fixed line, we now have only 8,000 loss-making free broadband customers left to migrate.”
It noted that over 80 per cent of new customers were signed up in unbundled areas, where prices are cheaper, and predicted that by March 2009 75-80 per cent of its broadband base would be connected to its own network.
Carphone Warehouse also revealed that although 50 per cent of its customers downloaded less than 1GB per month, peak time usage had grown by 22 per cent over the last year and it introduced traffic shaping measures in March to reign in higher numbers of peer-to-peer users.
“Looking forward, we anticipate a year of considerable further progress. Although we are mindful of a tough consumer environment, we see significant opportunity to evolve our retail model to address the opportunities of a changing marketplace. The broadband business is set to deliver significant further margin improvement, and provides us with excellent earnings visibility,” concluded Dunstone.
The group anticipated further growth of 400,000 customers over the financial year, with the aim of reaching its goal of a 3.5 million broadband base by March 2010.
Michael Phillips, BroadbandChoices.co.uk product director, said: “Some analysts have predicted that the broadband market is near saturation point, with the majority of ‘new’ customers migrating from competitors, but despite a slowdown, Carphone Warehouse has still managed reasonable growth.
“Although the market is clearly slowing, TalkTalk still offers one of the most competitive - and attractive - packages on the market with its ‘free broadband’ offer, and if Carphone Warehouse does acquire Tiscali then it will be able to branch out into lucrative digital TV bundles too.”
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