AOL customers costing Carphone Warehouse big time

I’ve been waving my hands, jumping up and down, whilst shouting to AOL UK customers to run from the Carphone Warehouse. To my uneducated brain, it seems like a good deal for the Carphone Warehouse board of directors and few others. However, the writers at TechCrunch UK have found a few holes in the plan.

Based on the subscriber numbers below, CPW’s newly acquired “broadband” customer base cost £370 per customer to acquire. I guess what CPW are hoping to do is convince the vast majority of AOL’s 1m broadband customers and especially the 600,000 dial up customers (not listed in the figures below) to migrate over to their TalkTalk phone service worth £9.99 per month with the carrot of “free broadband”.

So doing the maths, it will take approximately three years of TalkTalk revenue per customer before CPW breakeven on this deal i.e [(£9.99 x 12months) x 3 = £359]. This assumes that at least 60% of the AOL access customer base sign up for TalkTalk which seems unlikely given the fact that less than 50% of the current CPW TalkTalk customers applied for the “free” broadband offer and less than 10% of them actually ended up migrating over to their free broadband offer.

3 years to get any money back? And the deal comes as Dunstone et al admit that their broadband service has ‘issues?’ Could this be the beginning of the end?

Tech Crunch UK: Why did Carphone Warehouse buy AOL UK’s “access” business!?

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6 responses to “AOL customers costing Carphone Warehouse big time

  1. Don’t forget that CPW are also buying content from AOL.

  2. I guess you don’t actaully know how much money this company makes purely from sellling mobile contracts do you. You have to remember, all the money goes into one big pot at the end of the day.

  3. Since going LLU life has been dark. I managed to get the email and mobile for the director of cusomter services (available on request). After a previous ongoing complaint they gave me £70 compensation. However, this was not for my broadband. This is now slower than it was before and times out frequently. Shocking.

  4. Dear Sir

    Thank you for your email.

    I can confirm that Carphone Warehouse is taking over AOL’s company. However it will still continue to operate as a separate company from Carphone Warehouse’s other Broadband suppliers, TalkTalk and OneTel, if you do have any queries please contact the AOL customer services and they will be able to help you further.

    Have tried to cancel AOL because of disatisfaction and also because I think things will get worse with CPW but am told I still have 5 months left on my aOL contract.Funny though I didn’t make any contract with CPW.

  5. Pingback: AOL customers costing Carphone Warehouse big time :: Newstack

  6. Pingback: Little update to AOL + CPW lovefest « Less Talk Talk: More Service. The unofficial, unaffiliated Talk Talk blog.

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