Carphone halves broadband customer forecast

Carphone halves broadband customer forecast

Carphone Warehouse today cut its expectations for new broadband customers this year from 400,000 to around 200,000.

The company in its Q1 trading update said that the sliding housing market was causing people to re-think about changing their broadband as frequently.

The group, which has 2.8 million broadband customers, warned in June that customer numbers had been lower than expected since April.

Carphone added a net 41,000 broadband users over the quarter - lower than expected by City forecasts - and lowered guidance on revenue growth down from previous forecasts of 4-5%.

In the three months to June 28, retail revenues at Carphone climbed 10% to £498m, but that represented a like-for-like fall of 1.4% compared with the same period last year.

Retail gross profit was up 1.7% on a like-for-like basis.

Distribution revenues rose 4% to £735 million and mobile connections increased 12% to 2.6 million, thanks in part to the success of the iPhone.

Carphone added that its Best Buy Mobile joint venture in the US continued to perform ‘outstandingly well’.

Although second-quarter trading has been given an early boost by the launch of the new iPhone 3G, the group said it remained ‘understandably cautious about the consumer environment’. Shares in the group fell more than 3% on the news.

But despite the lower than expected customer numbers, chief executive Charles Dunstone said the current difficulties brought some advantages.

He said: ‘Connections volumes have continued to grow well, driven by smartphones and mobile broadband sales.

‘Our market share in these segments has been strong, thanks to our re-positioning of the business and the introduction of our broadened free laptop offer during the quarter.

‘However, margin per connection was a little weaker with the shift in mix towards mobile broadband.

‘One of the benefits of the current environment is that churn is low and falling, making our relationship with customers increasingly valuable.’

Written by Mobile Today
Mobile Today


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