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Carphone Warehouse buys Spanish telco

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The Carphone Warehouse is to bring its own brand of discount telephony services to consumers in Spain following the acquisition of alternative fixed-line telco Xtra Telecom.

The residential service is to be modelled on The Carphone Warehouse's talktalk service in the UK and should be up and running in Spain within the next six months.

Just like in the UK, The Carphone Warehouse is to use its chain of high street stores - The Phone House - to flog services to consumers in Spain. Xtra supplies technical and network support, providing a "sound platform for its entry into the Spanish fixed line market".

Said Carphone Warehouse chief exec Charles Dunstone: "With the deregulation of the European telecoms market, carrier pre-select services offering business and residential customers a seamless and lower cost alternative to incumbent telcos are becoming a natural and growing trend.

"We see opportunities to enter this market in a number of countries where we already have well-established operations, replicating and adapting the successful model we have developed in the UK with Opal and talktalk.

"The Spanish market is particularly attractive as our first fixed line step abroad, because of the critical mass and momentum of our retail business and the relatively high market share of the incumbent provider."

Carphone Warehouse is to stump up €11.5m (£7.68m) over the next two years for Xtra and could pay a further €12.2m (£8.14m) over the next two years if certain financial targets are met.

Xtra is an alternative telecoms carrier with national coverage in Spain and currently serves the business and wholesale market. Last year it generated revenues of around €34.9m (£23.29m) and made a marginal EBITDA profit.

By late morning shares in The Carphone Warehouse were up 2.25p (1.6 per cent) at 143.25p. ®

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