TalkTalk to be broken off from Carphone Warehouse by July 2010
Carphone Warehouse have today announced that they will separate TalkTalk from the Carphone Warehouse / Best Buy Europe business by July 2010.
"It's been increasingly obvious that the Group is now two businesses - Best Buy Europe and TalkTalk Group. The one grew out of the other; but both have now reached the stage where there are no material synergies between them and where, for operational and competitive reasons, they need to operate independently. The businesses are effectively run as separate entities already, each with highly experienced and strong management teams."
"The logic to demerge the two businesses and to give each shareholder a proportional direct interest in both is therefore clear. We have undertaken the necessary planning work to confirm our view that this is in shareholders' interests and to determine the practicable way of achieving the demerger. We are now close to finalising separate banking facilities for Best Buy Europe, which enables us to be confident of completing our demerger process at the latest by July 2010."Charles Dunstone (CEO), Carphone Warehouse Group Plc
Each is expected to be listed separately as publicly quoted companies. The news comes as Carphone announce their preliminary results for the year ending 31st March 2009. Revenue fell over the group from £1.424bn down to £1.385bn.
Broadband customers grew by 186,000 although 93,000 were lost through the AOL integration process. Churn of customers was also encouraging, falling materially year-on-year. This may be helped by the downturn in the economy meaning customers are happier to stay on cheaper services. 325 exchanges were unbundled in the year taking the total of fully unbundled to 1,705 and partially-unbundled to 1,251 which gives approximately 80% coverage of the UK population. 2.2m customers currently use the unbundled network, around 78% of broadband customers or 39% of unbundled lines in the UK.
The £236m acquisition of Tiscali is expected to be complete in June and will make TalkTalk Group the UK's largest residential broadband provider with 4.25m subscribers, and the second largest in the overall broadband market. The integration of Tiscali is expected to release £40m to £50m by March 2011 through network integration and simplification, customer migration and billing integration.