Carphone to reveal break-up plans

After months of speculation, this week Carphone Warehouse is to announce a demerger of its retail and telecoms interests, but the break-up of the group may not happen until 2010, the Financial Times   reports.

Charles Dunstone, Carphone\'s chief executive, is expected to use the group\'s fourth-quarter trading update on Wednesday to set out how a demerger could be executed, without giving a precise timetable, the newspaper says.

A group break-up would involve renegotiating Carphone\'s £925m of credit facilities, and they would be refinanced at less favourable rates if a demerger happened now, it continues.

Investors have been pressing Carphone to break itself up because they see little logic to a group comprised of retail and telecoms interests.

Over the past three years, Carphone used its retail shops that sell mobile phones to also sign up customers to its fixed-line phone and broadband services..

Carphone is the UK\'s third largest broadband supplier, and is thought to be still interested in buying the UK broadband assets of Tiscali, the troubled Italian telecoms company. It had an informal offer rejected last year.

Carphone last year put its retail assets into a joint venture with Best Buy, the leading US consumer electronics company. Best Buy Europe, as the venture is called, owns Carphone\'s 2,400 European stores selling mobile phones. Carphone is the junior partner.

Carphone reported revenue of £697 million for the six months to September 27, down 2 % on the same period in 2008. The group recorded a pre tax loss of £11m. Carphone\'s net debt was £286 million at September 27, according to the FT.