Broadband may be Dunstone's Iraq war

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The Independent Online

Charles Dunstone, the chief executive of Carphone Warehouse, has compared the company's entry into the broadband market, which has been plagued by customer service issues, with Tony Blair's controversial decision to send troops into Iraq.

Mr Dunstone, who was pictured on a holiday boat with Mr Blair last summer, has admitted that the number of people signing up to the "free" broadband offer from Carphone's TalkTalk service was double what he had expected: 340,000 applications were registered in the first two months. As a result, the company has struggled to connect customers on time, some waiting months for broadband services despite paying a telephone subscription from the outset.

In the BBC's Money Programme - "The Broadband Boom and You" - to be broadcast tonight, Mr Dunstone was asked about TalkTalk's customer service issues at the time of its broadband launch earlier this year. Mr Dunstone replies: "I've personally stood up and put my name to it so people know who to blame. And I think it's fair to say at this stage, 'Is this the greatest thing Carphone Warehouse have ever done? Or is this Charles Dunstone's Iraq War?'"

Carphone is boosting its callcentre capacity after being inundated with calls for the broadband product. The company is providing free broadband access to customers who subscribe to its fixed-line TalkTalk voice product. Mr Dunstone, said: "It was absolute chaos and it was beyond my wildest expectations. I had about 10 minutes of wonderful sort of satisfaction and then I started to get butterflies in my stomach." Over the past decade, he has built Carphone Warehouse into Europe's largest mobile phone retailer.

He also said he resented TalkTall's product being described as the "Lada of broadband" by Ian Livingston, the head of BT Retail. Mr Livingston said like Lada cars, some broadband offers might be cheaper "but you get a lot less with it". Mr Dunstone, who referred to himself as "recklessly optimistic at times", has staked his reputation on improving the speed with which Carphone connects its broadband customers and improving customer service levels.

Elsewhere in the broadband sector, the niche reseller Plusnet unveiled disappointing interim results that showed subscriber acquisitions of only 1,900 a month, leaving it with a meagre customer base of 198,000. Plusnet has launched a £9.99-a-month broadband product that does not require a customer to sign a contract but investors remain concerned that it will struggle to cope with the current turbulence in the UK broadband market.