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?
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