Free broadband problems hit Carphone profits

Carphone Warehouse reported a near 10% fall in annual profits today after the Talk Talk owner counted the cost of its troubled launch of free broadband.

Pre-tax profits for the year to March 31 slipped to £123.1m (€181.6m) because of £80.5m (€118.8m) of losses linked to Talk Talk and the start of its Virgin Mobile joint venture in France.

Customer service problems following “unprecedented demand” for free broadband caused costs to spiral in the UK venture.

The company said it had put those problems behind it, adding that it was cutting the price of line rental on its Talk Talk telephone service by 50p (74c) to £10.50p (€15.50c).