In the broadband world, Carphone Warehouse is best known for its 'free' broadband deals via TalkTalk which since its launch in 2006 has produced a lot of publicity for the group, some good some bad. Some marketing people will argue any publicity is good publicity as it ensures people know your brand. The group has published its half year results for the period up to the 29 September 2007.
Carphone Warehouse apparently has unbundled 2,212 exchanges where it can offer its fully unbundled TalkTalk packages, and currently 55% of the connections from the total of 2.5 million in the group are unbundled. This is expected to rise to 70%.
"We added 215,000 net new broadband customers during the period, taking our total customer base to 2.5m, equivalent to a share of approximately 17% of the UK broadband market. The AOL base declined during the period, as we focused on recruiting customers only within our exchange footprint through geographical pricing variations. However, towards the end of the period, as our AOL footprint extended rapidly and we introduced our free Dell laptop offer, the AOL base stabilised. The TalkTalk base made further good progress, reaching one million customers within 18 months of the launch of Free Broadband. Blended broadband ARPU for the first half was £21.7, ahead of our expectations and reflecting a higher proportion of TalkTalk customers and good sell-through of voice services to AOL customers."Extract from Carphone Warehouse half year results
Analysis of the recent rash of financial reports over at the Financial Times highlights the competition between BT (the grand old master) and Talk Talk (the new upstart) and makes what we believe is a good observation. This observation is that while BT may lose ground to Talk Talk it will still earn residual income from the unbundled lines. This means even if Talk Talk and other unbundled operators were to dominate the UK broadband and telephone market there would still be a place for BT, albeit probably a much leaner BT.