Carphone Warehouse 2008 Annual Report Download - page 7

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advantage
We have three major competitive advantages in our UK Fixed Line business: our distribution, our telecoms
network and our scale. We are the only major residential telecoms player in the UK with a network of stores,
which provide a consistent and low cost channel for customer recruitment. Increasingly they are also playing a
role in explaining the complexities of wireless technology to customers. Our telecoms network is the only large
scale all-IP network in the UK, meaning that voice and data traffic is carried over a single infrastructure, making
us highly cost efficient and allowing the development of new value-added services over time. Scale is essential
to generate an attractive return from the high fixed costs of a telecoms network; it creates barriers to entry
for new players and means that the profitability of each marginal customer is very high.
Our UK Fixed Line business has grown from its launch five years
ago to being the number three operator, through a combination
of organic growth and strategic acquisitions.
4% 19%
2,155
31% 40% 55% 61% 67%
284
528
2,271 2,397 2,486 2,604 2,713
Sep 2006Jun 2006 Dec 2006 Mar 2007 Jun 2007 Sep 2007 Dec 2007 Mar 2008
Jun 06
Aug 06
Oct 06
Dec 06
Feb 07
Apr 07
Jun 07
Aug 07
Oct 07
Dec 07
Feb 08
0
500
1000
1500
2000
Nearly 70% of customers on CPW Networks (000s)
On CPW Networks Off CPW Networks
Unbundled exchanges now covering around 80% of the UK population
AOL SMPF CPWN MPF