Carphone Warehouse rings up higher sales

Leap in new connections

Europe's biggest mobile phone retailer, Carphone Warehouse, said in a trading update today that sales are up on the back of a 25 per cent leap in new connections.

The UK-headquartered company, which runs over 1,300 shops across Europe, said that pre-pay connections were up by almost 30 per cent in the 13 weeks to 25 September, while contract subscriptions rose by more than 18 per cent. The total number of connections in the quarter came to 1.55m.

Carphone Warehouse is paid a commission by mobile operators for each new subscription, with post-pay contracts especially lucrative. Ever-lower rates for mobile phone calls, and the availability of stylish and cheaper handsets, have driven the firm's success in recent months.

"All of our core businesses continue to perform well and trading over the first half has been ahead of our expectations," said Chief Executive Charles Dunstone, who predicted interim profits to be £27m ($48m) more than current expectations. "The mobile market remains buoyant and we have achieved further good growth in both subscription and pre-pay connections."

In the Republic, business has also been especially good this year, according to David Turnbull, retail director of Carphone Warehouse Ireland. "We are expecting our strongest Christmas ever," he added.

Dunstone said that the firm's landline TalkTalk service was continuing to "dominate the UK CPS (carrier pre-select) market, leveraging the competitive advantages of the Opal network and our high street presence." Carphone Warehouse added another 137,000 TalkTalk customers in the period, taking its total to 648,000, which should allow it to meet its target of 900,000 by March 2005.

TalkTalk enables subscribers to make free landline calls to other individuals who have signed up with the company. While the firm has recently expanded the service to Spain and Germany, Turnbull said that there are no immediate plans for an Irish TalkTalk launch.

Sales of phones without a subscription, or SIM-free sales, rose by 36.8 per cent to 140,000 units. Fifty new stores were opened in the period, taking the total to 1,329, an increase of 154 over September 2003.

Phone House Telecom, the firm's German mobile service provider, added 39,000 new customers over the quarter, taking the total to 747,000, representing year-on-year growth of 15.2 per cent. Overall, Carphone Warehouse's mobile customer base, including Fresh and FM operations, increased by 11.3 per cent to 2.08 million.

Copyright © 2004, ENN

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