Carphone reports £70m loss and signs £370m AOL internet deal

Carphone Warehouse agreed today to buy the UK arm of internet provider AOL from Time Warner for £370 million.

The deal will give Carphone around two million broadband customers and make it the third largest provider of high-speed internet in the UK.

It came as the mobile phone retailer revealed losses from offering "free" broadband to 625,000 of its Talk Talk customers will hit £70 million this year.

Carphone Warehouse originally expected losses of £50 million in its broadband business but widened its estimates by £20 million today after 625,000 people applied for the service since its launch in April.

The broadband deal - which offers customers "free" connection if they pay £20 a month for the landline phone service - has been plagued by problems as the firm struggles to cope with huge demand.