Mobile phone chain Carphone Warehouse is to accelerate its move into the fixed line market.
The company launched its rival service to BT - called 'talktalk' - in March and now has 140,000 customers.
It said the faster-than-expected take up of the service meant it was raising its customer target from 300,000 to between 350,000-400,000 by March 2004.
But expansion costs meant it expected the service to incur losses of between £7m-£8m this year, up from the previous estimate of £3m.
'Going for it'
Carphone said it was signing up 8,000 new customers every week.
"We're given a good opportunity to grow this business, and we're going to go for it over the next 18 months," finance director Roger Taylor told the Reuters news agency.
The company has now set a target of between 600,000 and 700,000 talktalk subscribers by March 2005.
In Carphone's traditional mobile business, connections rose 16.3% to 1.24 million during the 13 weeks to 26 September.
Subscription connections rose by 24% helped by strong growth in France and Spain.
The firm said its German operations had been boosted by the purchase of mobile service reseller Hutchison Telecommunications in Germany earlier this year.
"Increasing network competition for subscription customers, good progress in our German operations, and continued strong growth in our talktalk customer base have been the highlights of an excellent second quarter," said chief executive Charles Dunstone.