Handset sales increased 11 per cent on 2006, to 3.6 million, but missed targets of 15 per cent.
Carphone said in a trading statement the prepay market over Christmas “was a little more subdued than last year”.
But Carphone chief executive Charles Dunston said it still outperformed the market for contract and prepay sales during the quarter. He said: “These figures come on the back of enormous prepay sales for two years.”
Carphone finance director Roger Taylor chipped in: “Overall for the quarter, in a quite challenging retail environment, I think we did pretty well.”
Retail revenue for Q4 grew 13 per cent to £650 million.