3rd Quarter Trading Update

Carphone Warehouse Group PLC
13 January 2005


Thursday 13 January 2005

Embargoed until 0700 hours


The Carphone Warehouse Group PLC

Third Quarter Trading Update

Continued strong growth

The Carphone Warehouse announces its third quarter trading update for the
thirteen weeks to 25 December 2004.

Distribution

  • 24.9% growth in Retail revenues, +11.2% like-for-like
  • 4.3% growth in like-for-like Retail gross profit
  • 23.1% growth in connections to 2.06m
  • 95 new stores, taking the total to 1,424
  • 25.8% growth in Insurance base to 1.57m

Telecoms Services

  • Fixed Line revenue growth of 58.0% to £99.7m
  • Mobile revenue growth of 14.6% to £101.2m
  • 762,000 TalkTalk UK customers


Charles Dunstone, Chief Executive Officer, said:

'These figures represent a further period of strong growth.  Our stores traded
well and we achieved like-for-like growth despite an excellent Christmas last
year.  TalkTalk continues to attract customers at a healthy rate and the initial
response to our broadband package has been promising.  Looking ahead, we believe
market conditions will continue to play to our strengths, and we are confident
of delivering a full year result ahead of current consensus market 
expectations.'

Distribution

Total connections rose 23.1% to 2.06m.  The mobile market was strong over the
Christmas period, particularly on pre-pay, and handset availability was good.
Subscription connections were up 8.9% to 0.75m and pre-pay connections
(including SIM-free) were up 33.0% to 1.31m.

Retail revenues rose 24.9% to £355.8m.  Like-for-like revenue growth was 11.2%,
driven by a rise in connections per store and a significant increase in revenue
per connection on both subscription and pre-pay.  Like-for-like gross profit
growth was 4.3%, with gross profit per connection on both subscription and
pre-pay in line with the first half.  We opened 95 net new stores during the
quarter, taking the total portfolio to 1,424.  We have therefore achieved our
target of 200 openings for the current financial year and anticipate a further
20-30 openings by the end of March.

Other revenue streams within Distribution continued to benefit from strong
connections growth.  The Online channel grew very strongly, with revenues up
139.4%.  The Insurance customer base grew by 25.8% to 1.57m, driving Insurance
revenues up 23.6% to £26.1m.  Ongoing revenues from our share of subscription
customers' ARPU were up 22.8% to £11.7m.

Telecoms Services

Total Fixed Line revenues rose 58.0% to £99.7m.  Excluding the acquisitions of
NTel and Xtra, revenue growth was 35.8%.

Business traffic over the network grew 15.0% to 1.34bn minutes during the
quarter.   The regulatory cuts to mobile termination rates in September reduced
the cost for operators of terminating calls on mobile networks.  As planned,
Opal passed on these savings to its customers immediately, with the result that
average revenue per minute at Opal has fallen by more than 10% since September.

The positive mix trend at Opal towards direct and reseller business and away
from premium rate services shown in the first half has continued, with premium
rate revenues falling by 32.5% and all other Opal revenues rising by 8.2%, with
an encouraging trend in new business wins towards the end of the period.  As a
result of these two factors, Opal revenues in the quarter fell 3.7% to £52.4m.
The impact on underlying profitability has been in line with expectations.

TalkTalk UK added a further 114,000 customers in the quarter, taking the total
base to 762,000.    Total TalkTalk UK revenues were £32.0m, with ARPU, margins
and SAC continuing to trend in line with expectations.   Revenues from our
non-UK fixed line operations were £15.2m. Our TalkTalk operations in Spain,
France, Germany and Switzerland are making steady progress since launch.

Total Mobile Services revenues were up 14.6% to £101.2m, driven primarily by
continued strong growth in The Phone House Telecom base in Germany.  The overall
Mobile customer base grew 12.4% to 2.20m.

Outlook

The outlook for our Retail and associated business units remains positive.  The
mobile networks continue to compete aggressively for customers and we are
confident of making further good progress in connections in the final quarter of
this financial year, driven predominantly by the continuing success of our store
opening programme.  We expect the migration of customers to 3G platforms to gain
significant momentum in the second half of the calendar year.  On the fixed line
side, TalkTalk UK is set to continue its strong progress and we are encouraged
by the initial response to our broadband proposition.  Overall, we expect the
group to achieve a full year result ahead of current consensus market
expectations.

Conference call

There will be a conference call for investors and analysts at 9.00 am this
morning.   The dial-in numbers are 0845 301 4094 for UK callers and [phone]
9482 for international callers.  The call will also be broadcast on our website,
www.cpwplc.com.  A replay will be available for seven days, for which the
dial-in number is [phone], account number 897311, recording number
050113.

Next trading update

The next trading update will be on 14 April 2005, when we will publish Q4
connections and customer numbers and give further guidance on the full year
outcome.  We will also be hosting a morning of presentations for analysts and
investors on that day, in line with previous years.



For Further Information

For analyst and institutional enquiries
Roger Taylor                                                       07715 170 090
Peregrine Riviere                                                  07909 907193

For media enquiries
Vanessa Tipple                                                     07947 000 021

Anthony Carlisle                                                   07973 611 888
Citigate Dewe Rogerson                                             020 7638 9571




Operating and Financial Statistics

Connections and store numbers

                               13 weeks to 25 December 2004            39 weeks to 25 December 2004
                                  2004         2003      % change         2004         2003      % change
Connections
Subscription                   751,741      690,215          8.9%    2,041,213    1,750,572         16.6%
Pre-pay                      1,159,951      861,987         34.6%    2,392,670    1,825,611         31.1%
SIM-free                       149,437      122,785         21.7%      392,897      336,337         16.8%
Group                        2,061,129    1,674,987         23.1%    4,826,780    3,912,520         23.4%

Store numbers                    1,424        1,221         16.6%
Excluding franchise              1,362        1,200         13.5%
stores




Like for like data
                               13 weeks to 25 December 2004            39 weeks to 25 December 2004
                                Revenue          Gross Profit          Revenue           Gross Profit

Group                            11.2%               4.3%               11.5%                5.9%





Customer bases
                                                      As at 25 December 2004
(000s)                                               2004            2003        % change

Insurance                                           1,567           1,245           25.8%
Telecoms Services - Mobile                          2,197           1,954           12.4%
TalkTalk UK                                           762             239          218.7%





Revenues
                                13 weeks to 25 December 2004           39 weeks to 25 December 2004
(£000s)                            2004         2003     % change         2004         2003     % change

Distribution
Retail                          355,758      284,770        24.9%      847,119      685,960         23.5%
Online                           39,641       16,555       139.4%       84,896       43,046         97.2%
Insurance                        26,140       21,150        23.6%       73,958       56,965         29.8%
Ongoing                          11,706        9,530        22.8%       34,658       28,912         19.9%
Total                           433,245      332,005        30.5%    1,040,631      814,883         27.7%

Wholesale                        39,513       38,579         2.4%      100,245      140,768        -28.8%

Telecoms Services
Mobile                          101,240       88,361        14.6%      282,035      216,573         30.2%
Fixed Line                       99,690       63,104        58.0%      291,764      175,361         66.4%
Total                           200,930      151,465        32.7%      573,799      391,934         46.4%

Eliminations                    (5,096)            -                  (13,129)            -             -

Group Total                     668,592      522,049        28.1%    1,701,546    1,347,585         26.3%






Switched minutes

                        13 weeks to 25 December 2004                39 weeks to 25 December 2004
(m)                       2004          2003      % change          2004          2003           % change

Opal                     1,341         1,166         15.0%         3,868         3,248              19.1%
TalkTalk                 1,187           272        336.9%         2,798           485             477.0%
Total                    2,528         1,438         75.8%         6,666         3,733              78.6%





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