Carphone Warehouse makes £72m losses

Profits slump after launch of free broadband service

Carphone Warehouse leads the provision of free broadband

Mobile phone giant Carphone Warehouse has announced start-up losses of £72m from the launch of the UK’s first free broadband service last year.

Overall profits for the group fell by 9.5 per cent from £136.1m to £123.1m, reflecting combined start-up losses of £80.5m in the launch of Free Broadband and Virgin Mobile in France.

The company is part of wider changes in the UK broadband provision market. Carphone Warehouse's TalkTalk service was the first to offer free broadband with a voice deal. Orange now provides a similar package. And satellite TV giant Sky and Virgin offer broadband in bundles that include TV channels, interactive content and telephone services.

More than 30 per cent of all new broadband customers in the first quarter of the year went to Sky.

Last month the Post Office announced plans to sell broadband, as part of measures to reverse its ailing fortunes.