Carphone Warehouse, the UK mobile phone retailer, plans to expand its broadband network as it reported in line results showing it continues to beat the prevailing high street gloom.

Like-for-like sales at the group, which is the largest independent European phone retailer, increased 7.5 per cent for the first half and the total customer base grew 35 per cent to 5.75m, which the group attributed to increased competition between mobile network operators and demand for handsets with new features.

“The combination of these factors creates a very strong customer proposition and as a result, connections growth has been ahead of our expectations,” the group said.

Carphone also on Thursday announced a “major drive” into the UK broadband market using Opal, the network it bought in 2002 which it has so far used mostly for corporate and home fixed-line telephony.

In addition to its more than 1m fixed line telephone customers, Carphone said it plans to unbundled up to 1000 exchanges in the next three years.

Carphone said the move, which will cost an extra £10m to £15m per year in capital expenditure on top of the existing £15m per year, means Opal “is set to stimulate strong customer growth and improved profitability over the medium term,” it said.

After a decrease in first-half earnings, the Opal business was expected to record flat profit growth for the full-year, the group said, in a “difficult market”.

The announcement came as the group reported in-line results for the first half. Its pre-tax profits were £40.1m for the six months to September 30. The group made sales of £1.29bn, an increase of 25 per cent on the previous year. Earnings per share, before amortisation of acquisition intangibles, was 3.15p compared with 2.33p, and the dividend was 0.75p compared with 0.55p last year.

Meanwhile TalkTalk UK, the group’s own telephony service, added 139,000 voice customers, in line with earlier company forecasts.

The shares were 2.6 per cent higher at 203¾p.

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