The demerger may not happen for some time
Carphone Warehouse has announced that it plans to separate its mobile phone business from its TalkTalk fixed line and broadband operations.
However, it said the timing of the move would depend on how costly it was to split the group's credit facilities.
The split will create two listed firms, with Carphone founder Charles Dunstone set to be executive chairman of both.
The company also said that it had added a net 74,000 broadband connections in the first three months of 2009.
In a trading statement Carphone said that full-year earnings were set to be in-line with expectations.
"The macro environment will undoubtedly present challenges in the year ahead but at this stage we are not seeing it deteriorate further," said chief executive Charles Dunstone.
"We are well funded, and have clear and simple strategies for our two businesses which balance growth with tight operational efficiency and cash generation."
The group predicts that the coming year will see similar sales and profits to the year just completed.
The overall figure for net broadband connections comes from a 97,000 increase by TalkTalk and a 23,000 fall from its AOL Broadband business in the UK.