The Carphone Warehouse has bought the UK arm of AOL for £370 million. This makes Carphone Warehouse, with its TalkTalk brand, the third biggest internet provider in the UK behind NTL and BT. AOL UK has nearly 2 million customers, with 1.4 million of them on broadband. TalkTalk already has 412,000 active customers, most of which have come on board because of its massively popular free broadband offer.

This purchase will make Carphone Warehouse a serious threat to all other players in the market. Both Carphone Warehouse and AOL UK have invested heavily in local loop unbundling, the process where internet providers take ownership of part of the broadband network. The combined outfit will lead to serious cost savings.

It looks like TalkTalk and AOL UK will be run as separate brands for the foreseeable future.

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This entry was posted on Thursday, October 12th, 2006 at 2:50 pm and is filed under Broadband. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.