Carphone Warehouse hit as pre-pay customers hang up

Carphone Warehouse has suffered from tumbling pre-paid revenues during the consumer downturn, which hit its third-quarter underlying sales by nearly 5 per cent.

But the mobile phones specialist benefited from a rise in long-term contract volumes, amid demand for the latest smartphones, and its Virgin Mobile France division delivered a 15 per cent leap in revenues.

This could not offset a slump of between 35 per cent and 40 per cent in the pre-pay market, which resulted in Carphone Warehouse Europe's like-for-like revenues tumbling 4.7 per cent over the three months to 31 December, below City expectations.

Its pre-pay sales were hit by more consumers moving on to longer contracts, a dearth of smartphones in the low-end pre-pay market and cash-strapped shoppers cutting back on purchases.

Total revenues at Carphone fell 4.2 per cent to £990m.