Carphone Warehouse has shrugged off tough trading conditions to add 15,000 new broadband subscribers, putting it on target to end the year with 4.2 million, following its takeover of Tiscali's UK business.
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In its second quarter trading update released this morning, CEO Charles Dunstone said TalkTalk, the networking arm of Carphone Warehouse, had added a "higher than expected" 77,000 new broadband customers, but had lost 60,000 former Tiscali users "as expected". He said he expected to lose up to 100,000 more from the million accounts he had bought.
Dunstone said both TalkTalk and Best Buy Europe were trading well, allowing him to maintain the financial guidance given for the full year to March 2010.
TalkTalk's net gain followed the addition of 47,000 net new customers in the first quarter and lower churn compared to a year ago. The Tiscali customer base also showed less churn later in the quarter, he said.
"We anticipate the adjustment required [to the Tiscali customer base] will be a reduction of 160,000 customers, who are predominantly broadband customers. The consequential true-up payment due to us will be made from funds currently held in escrow," Dunstone said.
He was confident that TalkTalk would end the current financial year with a total broadband base of between 4.1 million and 4.2 million customers.
Dunstone said Best Buy Europe, the retail and distribution business in which CPW had a 50% share, performed well. "Despite an overall subdued handset market and tough year-on-year comparatives, due to the introduction of the 3G iPhone last July, we grew total connections by 2.0%."
He said the planned demerger of TalkTalk Group and Best Buy would enable the worth and potential of each business to be evaluated better. "We are increasingly confident of achieving the demerger by the end of March next year," he said.
Dunstone said its US arm, Best Buy Mobile, continued its very strong development. "We remain confident in the significant contribution we expect from this business in the current financial year," he said.