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Earnings: AOL Integration To Cost Carphone Warehouse Up To £22 Million

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The Carphone Warehouse took a £7 million hit in the 26 weeks to September 29 from costs of integrating the AOL (NYSE: TWX) ISP bought in late 2006 for £370 million (release and financials). It’s expecting a further hit of between £10 million and £15 million in the next half of the year, totaling £17 million to £22 million over the year. Even so, it lost an undisclosed number of AOL customers during the period “as we focused on recruiting customers only within our exchange footprint through geographical pricing variations”. Only the offer of a free laptop saw the AOL subscriber base stabilise. Carphone added 215,000 net new broadband customers, taking it up to a total 2.5 million, or 17 percent of the market, one million of those on TalkTalk.

Carphone was most concerned with its high street deal to retail a certain Apple (NSDQ: AAPL) gadget from Friday (photo is from press launch): “the launch of the iPhone and the mass adoption of mobile data services are likely to stimulate market growth”.

Existing mobile revenue was up five percent to £359 million (the Phone House business in Germany making up £186 million, up four percent) with eight percent more monthly subscribers at 933,000. The company claimed “good progress” on customer acquisition through its French MVNO partnership with Virgin Mobile, but it lost £4 million on partnerships comprising that and Best Buy’s Geek Squad. Overall, group revenue was up 18 percent to £2.14 billion and profit was £56 million, up from £14 million in the 2006 period.