Carphone Warehouse reported a near-10 per cent fall in annual profits after the Talk Talk owner counted the cost of its troubled launch of free broadband.

Pre-tax profits for the year to March 31 slipped to £123.1 million because of £80.5 million of losses linked to Talk Talk and the start of its Virgin Mobile joint venture in France.

Customer service problems following “unprecedented demand” for free broadband caused costs to spiral in the UK venture.

The company, which has stores in Broad Street and The Oracle, and throughout the area, said it had put those problems behind it, adding that it was cutting the price of line rental on its Talk Talk telephone service by 50p to £10.50.

The group was deluged with complaints following “unprecedented” levels of demand for its Talk Talk offer last year, which provided free high-speed internet to those customers paying £20 a month for a landline phone.

Chief executive Charles Dunstone admitted last year that the offer of free broadband had created a customer service “nightmare” for the firm.

Mr Dunstone said today: “The customer service issues which arose from the unprecedented response to our free broadband offer have now substantially been addressed.”

Carphone is now the UK’s third biggest broadband provider after bolstering the operation with the addition of AOL UK – the biggest deal in Carphone’s history.

Winnersh Triangle owner in US sell-off

Segro, the new name for property company Slough Estates, has sold its American division for £1.5 billion.

The Slough-headquartered group – which owns Winnersh Triangle – plans to return £250 million from the proceeds of the sale to shareholders through a special dividend payment.