Centrica plans to provide phone services

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The Independent Online
CENTRICA, THE supply arm of the former British Gas, unveiled plans yesterday to widen its range of household services by entering the telephone market in the next six months.

Confirmation that the group intends to offer a full telecom service, ranging from fixed-line and mobiles to Internet access, came as Centrica's chief executive, Roy Gardner, forecast its pounds 1bn takeover of the Automobile Association was "home and dry".

Centrica already offers home security and insurance, air-conditioning, plumbing and domestic-appliance repair alongside its traditional gas, electricity and three-star boiler maintenance businesses.

Mr Gardner said Centrica was in talks with a number of partners about entering the telephone market and hoped to strike a deal early next year. Centrica has already experimented by offering a telecom service to customers of its Goldfish credit card and has signed up 13,000 subscribers in conjunction with a telecom re-seller, Primus.

The move into telecoms forms part of an ambitious strategy to lift sales of Centrica's services division from pounds 282m to pounds 750m within three years.

Mr Gardner also forecast that Centrica will have signed up 2.5 million domestic electricity customers by the end of the year, making it the UK's third-largest electricity supplier and putting it on course to achieve its target of 4 million customers by the end of next year. It is currently losing gas customers at a rate of 15,000 a week but winning 37,000 new electricity customers.

The AA's 4.5 million members vote on the Centrica takeover next Thursday and stand to receive windfalls of pounds 240 each if the deal goes through. Mr Gardner said that if the full vote reflected the feedback from focus groups Centrica had been sampling then it was assured of the two-thirds support it needs.

Meanwhile, Centrica launched a fierce attack on the power generators over recent high prices in the electricity pool. Mr Gardner said: "We see no justification for these price spikes. They are the highest summer prices ever and if you compare them with prices in Europe they are way out of order." Ed Wallis, PowerGen's chairman, rejected Mr Gardner's claims saying: "There is no evidence to support what Roy is saying. It is not true."

Centrica reported a 124 per cent rise in pre-exceptional, pre-tax profits to pounds 286m for the six months to the end of June and a first interim dividend of 1p. But the figures were distorted by the renegotiation of gas contracts, and the underlying profit increase was nearer 34 per cent.