Increased competition among mobile phone networks helped drive Carphone Warehouse's Irish business into profit last year. Barry O'Halloranreports.

Carphone Warehouse Ltd, the Europe-wide group's Irish arm, has lodged accounts with the Companies Registration Office which show turnover grew 40 per cent to €65.2 million in the 12 months to April 1st last year.

Carphone Warehouse recorded a profit of €1.62 million during the year, compared with a loss of almost €2 million in 2005.

The company operates a chain of shops selling mobile phones and associated equipment. It is the only retailer that offers deals with all four networks operating in the Republic: 3, Meteor, O2 and Vodafone.

According to chief executive Stephen Mackarel, increased competition among mobile networks operating in the State was a key reason for the company's move into the black.

"Meteor and 3 began to move very aggressively to recruit contract [ bill-paying] customers, and O2 was also very, very aggressive in chasing contract business," he said.

"All four networks are key partners and they have been competing strongly with each other, something that was badly needed by consumers here."

Bill-paying customers now account for 29 per cent of O2's subscribers. An estimated 24 per cent of Vodafone's 2.2 million subscribers are on contract.

Meteor has increased customer numbers to 880,000, from about half that figure 15 months ago. About 12 per cent of these are on contract, compared with 2 per cent in early 2005.

The networks get bigger profits and revenue from contract customers than from prepaid subscribers. Figures released by O2 and Vodafone in recent years show that the Irish market is one of the most lucrative in the world for this business.

However, revenues per customer have been falling as competition begins to bite.

Mr Mackarel said 3, Meteor and O2 had been targeting both individual customers and businesses in a bid to boost bill-paying customer numbers.

The figures also show that Carphone Warehouse, part of Talk Talk, paid €2.3 million for the Irish business of Scandinavian operator Tele2 in December 2005. This was part of an overall €12.5 million deal by its British parent to acquire the Tele2 operation in both countries.

Carphone Warehouse plans to increase the number of its stores to 75 this year, a move that will create 150 new jobs, Mr Mackarel said.

The chain is responsible for the sale of one in every four mobile phones in the State.

Mr Mackarel said it was seeing increasing business in products such as broadband data cards.

It has also chosen Ireland to test one of its new "concept" stores, which will be located in Cork and will offer an expanded equipment range, including iPods.