Broadband to cost additional 20 million

Carphone Warehouse today revealed that the strong demand for free broadband will cost the company an additional 20 million into March next year.

This takes the total cost to 70 million in the current year. However, it said that it doesn’t expect the costs to impact into the following financial year to 2008.  The company cited three main reasons for the increase in costs.  Wholesale broadband costs, LLU migration delays and an increase in customer service costs.

In a statement, chief executive Charles Dunstone said:
“The unprecedented take-up of our free broadband offer means we have accelerated our customer service recruitment plans and incurred additional wholesale broadband costs. We now expect to incur start-up broadband losses of around £70 million in the current year, compared to our original guidance of £50 million. However, our underlying performance in the first half has been ahead of our expectations, and we expect interim headline pre-tax profits, before the impact of our broadband and Virgin Mobile France operations, to be up 50% year-on-year.”

As of 30 September, 625,000 applications have been made for free broadband, with 421,000 being connected.

The full trading statement is available at: http://www.cpwplc.com/