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Last Updated: Monday, 19 December 2005, 08:21 GMT
Carphone buys up OneTel for 132m
Carphone Warehouse store
Carphone is looking to increase users of its TalkTalk service
Europe's biggest mobile phone retailer Carphone Warehouse has splashed out more than 140m on a buying spree in an effort to "compete head on" with BT.

It has bought alternative fixed line telecom provider OneTel for 132m ($233m) - picking up 1.1m customers - from British Gas owner Centrica.

Meanwhile, Carphone has also purchased the UK and Irish fixed line operations of Swedish firm Tele2 for 8.5m.

Tele2 has around 188,000 UK customers and 36,000 in the Republic of Ireland.

Carphone said the combined deals would expand its current fixed line customer base from one million to around 2.4 million.

Customer boost

The commitment by Centrica to sign up more telecoms customers was a "fundamental part" of the deal and accounted for 37.1m of the acquisition price, the company added in a statement.

Our goal is to become the number one alternative residential telecoms provider in the UK market
Carphone Warehouse

"We believe that this significantly enhances the value of the transaction for the Carphone Warehouse as it gives us access to a substantial new source of potential customers through a well-recognised and successful channel."

The group also hopes to drum up more users via its deal with Centrica.

Under a three-year, 22m arrangement Centrica has promised to recruit more telecoms customers through its British Gas business.

"Our goal is to become the number one alternative residential telecoms provider in the UK market," Carphone said.

Competitive edge

Chief executive Charles Dunstone told BBC Radio 4 that the firm was "trying to create a base of customers to compete with BT" through the deals.

All OneTel and Tele2 customers will be moved to Carphone's TalkTalk service over the new year.

Looking ahead, Mr Dunstone said the group hoped to "compete head on" with BT, by ramping up its broadband service.

Centrica chief Sir Roy Gardiner said the utility group had sold its telephone operations as it wants to concentrate on its global energy markets.

"We have grown OneTel substantially over the past few years to become a significant residential fixed line competitor to BT," he said in a statement.

"We will continue offering telecoms services to our British Gas customers, but we don't need to own OneTel to do this."

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