It pays to TalkTalk to Carphone Warehouse

CARPHONE Warehouse today doubled the number of customers using its TalkTalk fixed-line services by spending up to £154m on acquiring Onetel.

The group - best known for its high street stores selling mobile phones - struck a deal with power supplier Centrica three months after Onetel was put up for sale.

Onetel will be rebranded TalkTalk and the deal also includes a three-year agreement under which Centrica has promised to recruit more telecoms customers through its British Gas business.

It brings together the 1.1m landline customers of Onetel with the 1.06m subscribers to TalkTalk, which was launched by Carphone two years ago.

In a separate statement, Carphone said it is also buying the fixed-line business of Tele2 in the UK and Ireland for 8.5m. This will give it a further 224,000 customers.

Carphone said the twin deals would help to fulfil its goal of becoming the undisputed challenger to BT in the fixed-line market.

The commitment by Centrica to sign up more telecoms customers was a "fundamental part" of the deal and accounted for 37.1m of the acquisition price, the company said. The breakdown of the Onetel deal sees 94.9m being spent on its residential and business operations and a further 22.2m will be paid to Centrica if higher customer recruitment targets are met.

In addition to its subscribers of its fixed-line services to UK homes, Onetel has 60,000 broadband customers, 40,000 mobile users and 50,000 business landline clients. A further quarter of a million have indirect access to telecoms services.

Revenues totalled 280m last year and 162m in the first half of 2005.

Carphone said it aimed to provide all of Onetel's residential customers with free on-network calls as quickly as possible.

l WEMBLEY Stadium contractor Multiplex warned today that it faced a further increase in losses on the flagship project.

While Multiplex said it still targeted the completion of the project in time for the FA Cup Final in May, the loss position was likely to be "substantially adverse" from previous indications.

Shares in the Australian-based company fell sharply as it warned that Wembley and factors related to other areas of business were likely to knock around 70m from 2006 profits.

Alex Newman, partner at Irwin Mitchell in Leeds

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