Accounts for online mobile giant Dial-A-Phone reveal the company saw its revenues tumble by almost half last year.
In the meantime connections dived from a one-time high of 40,000 customers a month to nearer 10,000.
The latest accounts for the online retailer show sales tumbled from £157.6m in 2006 to £86.7m last year.
Dial-A-Phone’s sales have come under severe pressure as operators turned against churn and Carphone mounted a major challenge to it in the online market.
However pre-tax profits in 2007 were unexpectedly high at £18.6m compared with just £251,146 the previous year.
With the business under pressure, Dial-A-Phone desperately renegotiated its terms with operator partners such as O2 and T-Mobile in a bid to align its interest with the networks.
Revenue share deals and deferred payment schemes would both have shifted the balance of when profits flowed into the business, giving a boost to the 2007 performance.