Carphone Warehouse in the red!

Carphone Warehouse has been dragged into the red by the cost of its new broadband service.

Pre-tax losses for the last six months came in at more than £4.6m.

That comes as the company revealed that start-up costs at its internet business topped £45m.

The company, meanwhile, says headline first-half profits rose 60%, to £59.3m from £37m for the same time last year.

First-half revenue was up 40% at £1.8bn.

The UK-based retailer was dealt a severe blow last month.

Vodafone then said it would stop selling contract connections in the UK from Carphone's stores and named rival Phones 4U as its exclusive partner.

Its shares took a beating on fears that other operators could follow suit and force it to lower commissions.

And Europe's biggest mobile phone retailer says the outlook for its business is good.

"The outlook continues to be positive. We see no change in the dynamics of the mobile phone market, with competition between players in the industry as strong as ever," the UK-based retailer said.

"We expect demand to be good over Christmas despite a tough comparable period," it said.

The company, which is also a major force in the fixed-line and broadband businesses in the UK, raised its interim dividend by 33% to 1p a share.