Retailer feels strain of free broadband offer
Carphone Warehouse is to roll out up to 200 Best Buy Mobile stores in the US, as its problematic free broadband offer continues to drain profit in the domestic market.

The mobile phone retailer and telecoms company will spend£60 million on its store portfolio this year, including the expansion of its Best Buy Mobile fascia in the US.

'Our US trial has been successful, allowing us to penetrate the substantial US market,' said chief executive Charles Dunstone in an update today.

The venture follows a five-month pilot in partnership with US home electronics giant Best Buy. The majority of the launches will be shop-in-shops in Best Buy outlets.

Numis analyst Steve Davies said: 'The US retail market remains dominated by network stores rather than independents, so there could be a substantial opportunity here.'

He warned that the start-up costs of the enterprise were one of the reasons for Numis' recent downgrade of Carphone's 2008 profit forecasts.

In Europe, Carphone Warehouse is to invest in 100 re-sites or refits of its store portfolio to reflect its repositioning from a handset retailer to a complete wireless technology and network provider.

The expansion comes as the retailer strives to clear a backlog of 260,000 loss-making free broadband customers in the UK.