Carphone Warehouse Is Feeling The Pain
There can be few companies with an acquisition and expansion record to rival that of Carphone Warehouse over the last few years, but it seems that trading may be slowing at the darling of the telecoms sector. Despite reporting a 12% increase in mobile phone connections over the first 10 weeks of the year (against internal targets of between 8% and 10%) the broadband division seems to be struggling.
This is the first time that we have seen mention of a slowdown in the broadband market, but Carphone Warehouse is attributing this to the slowdown in the housing market, with more people considering broadband connections when they move home. The massive acquisition of AOL’s broadband division has taken the group into a new league but the slowdown in the broadband market and reduced opportunities to sell on other broadband related products is hurting.
The announcement by Carphone Warehouse saw the shares in other broadband operators such as Sky and BT fall in sympathy. Looking longer term there is still massive scope for growth in the UK broadband industry although companies such as Carphone Warehouse will need to challenge the mobile phone networks which are ‘stealing’ broadband customers from the landline service companies.
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