Carphone Warehouse is considering splitting its TalkTalk broadband business from its retail operation.
Carphone Group chief executive Charles Dunstone said: “We have reached a watershed in the evolution of the Group, with two discrete and focused businesses with strong market positions and solid financial foundations.
“We recognise, however, that the structure of the Group may now no longer be appropriate for the optimal development of the two businesses.
“The board has therefore initiated a formal review of the Group’s corporate structure and capital requirements, which may lead to a separation of the two businesses.
“In this instance I would remain closely involved with both companies. We will provide an update on the review’s progress in Spring 2009.”
Carphone’s retail and distribution business is engaged in a joint-venture, Best Buy Europe, with US electronics retail Best Buy.
Its TalkTalk fixed line and broadband business could be worth up to £1 billion as a demerged proposition, industry watchers predict.
Carphone said its UK fixed line division, TalkTalk Group, generated generated revenues of £697 million and earnings before tax and interest of £53 million during the first half of its financial year.
Dunstone said: “We have continued to grow the broadband base steadily in a slowing market. TalkTalk, in particular, has performed very well, as customers are increasingly recognising it offers outstanding value combined with a significantly improved customer experience.”
Carphone has completed the migration of AOL customers it acquired from its £370 million purchase of AOL in late 2006, resulting in a reduction of its total broadband base of 93,000 customers.
“In view of the pressure on family budgets we plan to re-price AOL services and move people to TalkTalk with incremental line rental services more quickly than previously planned,” said Dunstone.
Carphone has just overhauled its TalkTalk offer for consumers. Click here for more.