Carphone Warehouse to spin off TalkTalk by 2010

Carphone Warehouse has confirmed plans to split off its telecoms business, TalkTalk, by July 2010.

The announcement came as Carphone Warehouse released annual results showing revenue dropped to 1.38 billion from 1.42 billion last year, representing a two per cent decline.

However, newly launched Best Buy Europe, a 50 per cent joint venture with US retail chain Best Buy, grew revenues 15 per cent to 3.56 billion.

Speaking on a conference call, Carphone Warehouse chief executive Charles Dunstone said the time has come to split its retail and ISP businesses. "It's been increasingly obvious that the group is now two businesses," said Dunstone.

"Both have reached the point where there are no material synergies between them... they need to operate independently."

Dunstone said Carphone Warehouse intends to make the two separately listed companies, allowing shareholders a better understanding of their value.

Carphone Warehouse is currently completing a 236 million deal to buy the UK arm of Italian broadband firm Tiscali. Once completed the deal will make TalkTalk the second largest UK broadband provider.

TalkTalk claims to have 2.8 million broadband customers and 1.1 million voice-only and dial-up subscribers.