Carphone Warehouse Re-Sells Virgin Broadband; Cuts Off Nose To Spite Face?

Carphone Warehouse (LON:CPW) is to act as an in-store reseller for broadband, TV, mobile and fixed-line services from Virgin Media (Nasdaq:VMED), Telegraph.co.uk reports. It could even do the same for BT. It’s a big coup for Virgin Media, which could do with some high street presence to boost customers signups after what have been a couple of quarters of high churn.
But how much sense does it make for Carphone Warehouse, which is itself a broadband operator through TalkTalk and AOL UK? It’s setting aside sections of stores for a new “Broadband Shop” dedicated to selling broadband packages, and hopes to sign up more suppliers. The retailer has long been an independent reseller of mobile contracts from the gamut of networks, including the former Virgin Mobile, but it doesn’t operate its own mobile service. Here, it is moving to re-selling rivals’ packages at the same time as its own. It comes a year after Carphone bought up AOL UK’s ISP business for £380 million, and the company is currently subsidising a free £450 laptop to 160,000 customers to sign up to AOL for two years.