Carphone broadband offer to trigger cut-throat price war

Carphone Warehouse’s launch of a “free” broadband service will force rivals like BT to retaliate with cut price offers and spark a price war among internet providers, according to industry experts.

Despite being labelled a “marketing gimmick” by one City analyst, Carphone’s offer has been described as “unprecedented” by others who predict it will revolutionise the high-speed internet market.

Broadband typically costs between &£15 and &£20 a month at present but Carphone says its service will cut residential bills by up to 60%.

Customers using the company’s TalkTalk service will be able to make unlimited local and national calls from their home phone for &£20.99 a month. The package also includes a broadband connection and unlimited calls to 28 European countries.

BT Retail chief operating officer John Petter dismisses Carphone’s offer as “a clever marketing ploy from a clever marketing team”.

Chris Williams, home telephony product manager at comparison service uSwitch, says: “Carphone Warehouse has set a benchmark for the industry and other providers will have little choice but to follow suit to be able to compete effectively. This unprecedented deal is great news for consumers and makes broadband accessible to all.”

Carphone will make a loss on &£50m on the business this year, but hopes to make a &£40m profit by 2008. Customers who join the service will no longer have to pay BT’s line rental charge but will pay a one-off connection fee of &£29.99.

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email

If you are looking for our Jobs site, please click here