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Carphone Warehouse Offers Free Broadband with Phone Service

1:47 am on April 12, 2006 | Category: Telecom Services, Web Services

Europeâ€™s biggest mobile phone retailer, Carphone Warehouse, has unveiled an aggressive new pricing strategy, by offering free broadband connections to its UK landline customers.

For just Â£21 (plus a Â£29.99 one-time connection fee), customers get unlimited fixed line calling within the UK, as well as a free broadband internet connection. This is quite a persuasive deal, as most British ISPs charge around Â£18/month for high-speed internet service alone.

To make this service profitable, Carphone will need to install its own equipment at about 1,000 UK telephone exchanges, so as to reduce its reliance on BT, the countryâ€™s former telecom monopoly.

“Our free broadband proposition, announced today, will require significant levels of investment in the short term. However, the broadband market is growing rapidly, and we are well placed to become a major force within it,” said Carphone Warehouse CEO, Charles Dunstone, expressing his utmost confidence in the new offering.

But some analysts are skeptical of Carphoneâ€™s ability to break into the already well established broadband market.

“Price wars do not always work in favour of the cheapest players … Carphone Warehouse is positioned well to compete on price with BT. However, it is just one of many competitors to BT with a strong hand to play,” said Ernst & Young telecom analyst, Richard Ireland.

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