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Last Updated: Monday, 2 April 2007, 08:08 GMT 09:08 UK
Carphone boosts customer support
Carphone Warehouse store
Carphone launched its broadband service last year
Carphone Warehouse has said that improving customer service at its TalkTalk broadband division will cost it an extra 10-15m this year.

The firm admitted last year that strong demand for the service, launched in April 2006, meant it had struggled to cope with connecting customers.

It said that in spending the extra money it aimed to "protect the brand and proposition for the longer term".

Carphone added that its annual results should meet market expectations.

'Favourable market opinion'

"We continue to invest in customer service as we work to further build the service levels at TalkTalk following the problems we incurred at launch," said Carphone Warehouse chief executive Charles Dunstone.

The group's historical record provides hope that the long-term game will eventually deliver for all
Retail analyst Keith Bowman

Its TalkTalk broadband service provides "free" high-speed internet access to those customers paying 20 a month for a landline phone.

Carphone added that it also expected to have to spend an extra 10-15m on start-up costs for its Virgin Mobile France joint venture.

Retail analyst Keith Bowman of Hargreaves Lansdown said the markets remained supportive of Carphone Warehouse.

"Customer service and brand integrity are being given priority over shareholders," he said.

"However, the group's historical record provides hope that the long-term game will eventually deliver for all.

"Despite intense competition, management credentials at Carphone remain high and market consensus opinion is still long-term favourable."

Carphone's shares were down 0.8% in Monday afternoon trading.

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