Carphone cuts broadband forecast and gives cautious outlook

By Mark Potter

LONDON (Reuters) - Telecoms group Carphone Warehouse Plc (CPW.L) cut its forecast for new broadband customers this year, blaming a slowdown in consumer spending and a plunge in the number of people moving house.

Europe's biggest independent mobile phone retailer and Britain's third-largest fixed-line telecoms and broadband provider said on Thursday it now expected to add 200,000 to 250,000 broadband customers this year, while it sees revenue at its fixed-line telecoms business to be broadly flat.

The group had previously forecast fixed-line revenue growth of 4 to 5 percent, with 400,000 broadband additions, though it warned in June that this might have to be lowered.

"Undoubtedly, there are a number of households who aren't, at the current moment in time, signing up to a broadband provider," Chief Financial Officer Roger Taylor told Reuters.

Carphone, which runs about 2,400 stores, said mobile phone subscriptions were holding up well, boosted by the recent launch of the iPhone 3G, but added that it remained "understandably cautious about the consumer environment".

UK consumer confidence fell to a record low in July, a survey by GfK NOP showed earlier on Thursday, while mortgage lender Nationwide NAT.UL reported a 1.7 percent monthly fall in house prices for the same month.

"Carphone's first-quarter (trading) statement indicates that both its telecoms and distribution JV divisions are struggling," Landsbanki analyst Dan Gardiner said in a research note.

Carphone shares, which have underperformed the DJ Stoxx European retail index .SXRP by about 25 percent this year, were down 1.9 percent at 189 pence by 9:44 a.m..