Rumours are spreading through the City that Carphone Warehouse is looking to spin off its broadband business as a separate entity from the mobile phone operation. It seems as though Charles Dunston, the founder and chief executive of the overall business, is looking to release as much shareholder value as possible from the ever-growing broadband business. While the timing of the move has come as a surprise to many experts it looks as though nothing will happen before 2009 at the earliest.
Even at this early stage there are suggestions that competing broadband operators in the UK, such as BSkyB, would be interested in acquiring the TalkTalk business for anywhere in the region of £900 million. This has also caught the attention of companies such as Vodafone, where an ongoing exposure to the UK broadband market is essential for their long-term success. TalkTalk is currently the third largest broadband supplier in the UK and is expected to bring in around £300 million in earnings this year.
While some may suggest that Carphone Warehouse is leaving the UK broadband market at a very early stage the fact is that competition is on the increase, prices are under pressure and customers want more services for their money. The potential release of TalkTalk could change the landscape of the UK broadband market forever.