News of the surprise deal came after Carphone Warehouse revealed earlier this morning that its pre-tax profit for the year to March 2007 would increase 50 per cent to£110 million, but would fall short of an anticipated£120 million due to unexpected extra coasts of£20 million for its Talk Talk free broadband offer.
The deal with Time Warner is expected to be completed by December 31 and will bring Carphone Warehouse about a further 2.1 million internet customers - 1.5 million of whom are connected to broadband.
Separately, in a trading update for the 13 weeks to September 30, the retailer said that its 'strong' performance was a result of its total customer numbers increasing 34 per cent to 2.4 million.
However, it also revealed that the recruitment of more call centre staff to deal with the 'unprecedented' demand for fixed-line business Talk Talk's free broadband offer had meant costs for the operation rose by£20 million to£70 million.
Carphone Warehouse chief executive Charles Dunstone said that, although 200,000 of 625,000 customers remained unconnected to broadband, the additional costs would not impact on figures for the year to March 2008.
He added: 'Our underlying performance for the first half has been ahead of our expectations and we expect interim pre-tax profits to be up 50 per cent year on year.'
Carphone Warehouse opened 66 stores in the second quarter, taking its portfolio to 1,921.