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Carphone Warehouse Admits Broadband Problems

Posted: 02nd Apr, 2007 By: MarkJ
The Carphone Warehouse today revealed its latest quarterly trading update, which saw the operator increase its broadband connections (including AOL UK) to 2.27m subscribers (702,000 on unbundled lines).

CW has also managed to unbundled 1,024 exchanges a full two months ahead of schedule. Unfortunately the group has once again been forced to admit that their broadband plans aren't running as smoothly as they would have liked:

Charles Dunstone, Chief Executive Officer, said: "In our broadband business, we have made excellent progress both on the rate of customer migration to unbundled lines, and the roll-out of our network of unbundled exchanges. The delays we reported in migration earlier in the year mean we are still a little behind our original business plan; but the current momentum of customer recruitment and migration gives us confidence that we will make up the lost ground by the summer. In our programme of unbundling exchanges, we have exceeded our initial target of unbundling 1,000 exchanges two months ahead of schedule.

We also continue to invest in customer service as we work to further build the service levels at TalkTalk following the problems we incurred at launch. As ever, our goal is not to maximise immediate profitability if it compromises the customer experience, but rather to protect the brand and proposition for the longer term. In all other respects, the economics of our broadband business remain in line with our original guidance.
"

CW has forecast additional broadband customer service costs of £10-15m, which are expected to be incurred between now and the same time next year. Elsewhere they offer a breakdown of their unbundling (LLU) progress:

At the end of March we had 375,000 TalkTalk customers on fully unbundled lines and 327,000 AOL customers on partially unbundled lines. In March alone we successfully migrated 120,000 TalkTalk customers to our own network.

The actual subscription breakdown highlights AOL UK with 1,535,000, which is a tiny increase over the previous results - 1,523,000. Meanwhile TalkTalk has done a better job with 736,000, which is up from 632,000 in the previous quarter.

We should probably also mention that AOL UK still has a fairly healthy dialup (narrowband) population of 505,000.
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