Red Ink Swamps Buyer of AOL UK

06 November 2006

LONDON: Self-proclaimed as Europe's largest cellphone retailing business, the formerly profitable Carphone Warehouse, has recorded a first-half loss of £4.6 million ($8.75m; €6.88m).

The firm, headed by publicity-conscious entrepreneur Charles Dunstone, attributes the onset of red ink to its recent diversification from retailing into the shark-ridden waters of telephony and broadband service provision.

Its entry into this market came last December with a £140.7m twin deal, in which Carphone bought losssmaking OneTel from utility group Centrica and the Anglo-Irish fixed-line businesses of Swedish firm Tele2.

Since when Dunstone's ambitions have outstripped his ability to fulfil consumer demand for the 'free' TalkTalk broadband internet service - a situation currently under scrutiny by UK communications regulator Ofcom, after it was deluged with consumer complaints.

Carphone admitted last month that TalkTalk is set to make a £70m loss this year [WARC News: 12-Oct-06]. It is unlikely that its recent purchase of AOL UK will help alleviate the group's fiscal woes in the foreseeable future.

Data sourced from; additional content by WARC staff