Carphone Warehouse is expected to announced plans to break up the retail and broadband empire founded by CEO Charles Dunstone almost 20 years ago.
The [London] Times said Dunstone has instructed bankers to explore the best route for a demerger that would hive off Talk Talk, his broadband and voice operation, into a separately listed vehicle.
Dunstone wants to release value in the company, which was worth £3.4 billion (€3.986 billion) at its peak in August 2007.
It is believed Dunstone will rule out immediate action to split the company up now because of volatility on the world's stock market: Carphone Warehouse is currently valued at £1.3 billion.
The article points out that the planned demerger of Cable & has been postponed until 2009 for the same reason.
However even making plans for a split at an unknown time in the future could put Dunstone in a stronger position. Carphone Warehouse's shares have fallen 57% over the last year, but he owns 32.6% of Carphone Warehouse, which includes the UK's third largest broadband provider with 2.8 million customers.
The broadband operation is expected to earn £300 million this year and in the past, there have been rumours of interest from Vodafone, which itself is manoeuvring to become a broadband provider of substance.