Hundreds of thousands of AOL customers may be tempted to take up Carphone Warehouse’s “free” broadband offer following the merger of the two companies last week — but they are being urged to wait until the phone company clears up its service problems, writes Ali Hussain.

Carphone became the third-largest internet supplier in Britain after taking on up to 2.1m AOL customers in a £370m cash deal.

The move followed an admission by Carphone that the unexpected high demand for its broadband offer had meant poor service for thousands of people who had signed up. They are still having to wait more than five weeks for any service, and the complaints are mounting.

About 625,000 people have signed up for the offer, available on Carphone’s Talk Talk home-phone package, since its launch in April, but 78,000 have since cancelled. What’s more, of those signed up, 126,000 still do not have broadband.

Chief executive Charles Dunstone admitted that “there are lots of things I would have wanted to do differently”.

Carphone has already increased its call-centre staff to cope with demand, but there is mounting pressure for it to take on more IT experts in order to deal with the company’s burgeoning market share.

The merger with AOL may ease the problem, though, because it has more experience in the market, more call centres and a better reputation for service.

Aamir Baloch of Firsthelpline, a comparison firm, said: “Over time, Talk Talk customers may see improved customer service. At present, many people, including me, are finding it difficult to get any support from Talk Talk. Trying to call them is a nightmare.

“With AOL, however, there are many call centres dotted around the country so they have, in theory, more resources which can be used to support Talk Talk’s own customers.”

AOL customers will not be automatically transferred to Talk Talk, but they could make savings by doing so.

With the free broadband package, you pay line rental at £11 a month plus a call plan of either £8.99 or £9.99 a month, depending on the package — a total of £19.99 or £20.99.

With AOL, however, you pay £11 line rental to BT plus £14.99 for broadband on its cheapest package, AOL Silver — a total of £25.99 a month.

Alternatives to Talk Talk include Telewest at £14.99 and Plusnet at £9.99.

Jason Lloyd of Moneysupermarket said: “If I was an existing AOL customer and I was coming to the end of my contract, I would be seriously looking at what else is out there because the market is shifting again.”

AOL customers will continue to access services, like e-mail, through an AOL site and will continue to get broadband over a BT line, unless they decide to switch.

Talk Talk customers, meanwhile, will be directed first to a new AOL/Talk Talk website when they go online.

Both sites will have content provided by AOL and Carphone, who will share advertising revenues from both, marking its first move into online content.

Last week, Carphone was dealt a severe blow when Vodafone said it would no longer sell its contract phones in Carphone stores.

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