Carphone Warehouse 'set to spark broadband price war'
Carphone Warehouse is set to launch a landgrab on the UK broadband market which will provoke a price war for high-speed internet access, it was reported today.
The company is expected to offer “free” broadband as part of a bundle with its Talk Talk landline service, according to The Sunday Times.
The move could lift the company into the FTSE 100, the paper reports.
It is understood the promotion, which will be backed by an extensive advertising campaign, is intended to build on Carphone Warehouse’s ambition to establish Talk Talk as the leading consumer alternative to BT Group.
At present, Carphone has about 75,000 broadband customers in the UK while BT Retail has 2.3 million and NTL 2.8 million.
Until now, Carphone has been hampered by having to resell BT’s wholesale broadband product.
However, it is investing £60m (€86.4m) to install its own broadband equipment in up to 1000 BT exchanges, allowing it to reach 70% of the population, the paper reports.
This move – known as local-loop unbundling – will give Carphone much more control of the speed, price and service standards of the broadband products it is able to offer.
BT is currently constrained in its ability to respond to Carphone’s challenge. Until 1.5 million local loops are unbundled, BT will remain subject to price controls imposed by Ofcom, the industry regulator.
Carphone is understood to have dubbed its broadband push Independence Day since it will offer customers independence from BT.
Through its wholesale arm BT supplies about 70% of Britain’s 10 million broadband customers, through brands that include Wanadoo, AOL and Tiscali.
Carphone operates 1,712 stores selling mobile phones in the UK and Europe.
Last year. It acquired Onetel and Tele2’s UK businesses which doubled the number of customers using its Talk Talk fixed-line services to 2.4 million.
Carphone was unavailable for comment.
