Carphone Warehouse profit dropped by 11 percent to £39 million between April and September but, in answer, the group on Tuesday confirmed plans to split itself in two - the Best Buy Europe electronics retailer, created when the US giant bought half of Carphone for $2.1 billion in May, and Carphone’s own TalkTalk ISP. The earnings announcement said the JV “has highlighted a number of issues relating to the resulting Group structure from both an operational and a stock market perspective” (the latter has slumped by over 60 percent this year)...

CEO Charles Dunstone “I believe we have reached a watershed in the evolution of the group, with two discrete and focused businesses with strong market positions and solid financial foundations. We recognise, however, that the structure of the group may now no longer be appropriate for the optimal development of the two businesses.” So the board is beginning a review and will report in the spring; Dunstone “would remain closely involved with both companies”.

—Best Buy Europe: Overall, Carphone scored two percent lower revenue of £697 million. Though global sales dipped, UK revenue rose eight percent to £779 million, with new sign-ups driven 11 percent higher to 5.7 million, primarily by iPhone 3G and the burgeoning mobile broadband dongle market. Though opening new Best Buy Europe stores next year, the unit will also close another 100 shops.

—TalkTalk: Broadband subs grew 12 percent year-on-year to 2.8 million, but that growth is now slowing from previous periods. Carphone lost 93,000 AOL (NYSE: TWX) Broadband customers but only after it discovered 48,000 phantom subscribers on AOL’s database in Virginia (who were nevertheless counting as sales) plus another 45,000 who were migrated to TalkTalk in order to be sold phone line rental. Other AOL customers switched to cheaper subscriptions, so Carphone now plans new AOL prices “in view of the pressure on family budgets”. TalkTalk’s telephone user base shrunk 35 percent to 1.3 million. No mention at all of Carphone’s agreement with behavioural ad network Phorm. To combat the economic downturn, Carphone will unveil a special credit-crunch price plan (see after jump).