Acquisition

Carphone Warehouse Group PLC
06 November 2002



Strictly embargoed until 0700 hours Wednesday 6 November 2002

                        The Carphone Warehouse Group PLC

   Acquisition of Opal Telecom PLC, a Leading UK Fixed Line Network Provider


      • Evolves strategy with move into fixed line services
      • Provides platform for penetration of corporate mobile market
      • Initial consideration of £65m, half in new shares
      • Significant revenue synergies through cross-selling to customer bases
        and through distribution channels
      • Earnings per share enhancing in first full year

The Carphone Warehouse Group PLC ('The Carphone Warehouse') today announces the
acquisition of the entire issued share capital of Opal Telecom PLC ('Opal'), a
fixed line, voice telecommunications network provider, for an initial
consideration of £65m with a further potential element of up to £18m payable
over two years.

Opal, founded in 1995, is one of the UK's largest independent telecoms network
operators. With operations in Warrington, London and the West Midlands, Opal
offers fixed line voice services primarily to the corporate and small and medium
sized enterprise ('SME') market in the UK. Opal owns 5 switches and has 65
interconnects with BT, and leases capacity from BT and other infrastructure
providers. Opal has 20,000 corporate customers and currently bills over 200
million switched minutes per month. For the year ended 31 December 2001, Opal
had profit before interest, tax and exceptionals of £3.2m, loss after
exceptional items before tax of £4.5m and net liabilities of £10.7m.

Revenue for the years ended 31 December 2000 and 2001 were £40.5m and £92.3m
respectively. Unaudited revenue for the six months ended 30 June 2002 was £61.3m
and unaudited profit before interest and tax was in excess of £3.5m.

The acquisition of Opal provides The Carphone Warehouse with the opportunity to
offer domestic fixed line voice services through its existing retail
distribution channel. The recent implementation of regulatory changes in the
Carrier Pre-Select ('CPS') market makes it easier than ever for customers to
switch fixed line providers. Additionally, the combination of Opal with The
Carphone Warehouse's extensive UK store network provides The Carphone Warehouse
with a platform for expansion into the UK SME market for mobile services while
at the same time increasing its access to stable, recurring revenues.

Hans Snook, Chairman of The Carphone Warehouse, said:

'Opal is the leader in its field. It has a first rate management team, an
impressive track record and strong growth prospects. The acquisition is a
logical evolution of The Carphone Warehouse's strategy and enables us to bring
Opal's services to the wide retail market as well as reinforcing their strength
with corporate customers. This is a value-creating transaction. We are delighted
to welcome Opal's team and look forward to offering our customers a more
rewarding fixed line life as well as a better mobile one.'

Charles Dunstone, Chief Executive Officer of The Carphone Warehouse, said:

'The Opal business and the Opal management team will be an instrumental part of
our stated strategy of driving growth through penetration of our existing
geographic markets while at the same time increasing our recurring revenues.
Moreover, in contrast to more conventional fixed line operators, Opal has a
business model based on switches and leased lines which maximises scalability,
operational flexibility and the preservation of capital.'

David Goldie, Chief Executive Officer of Opal, said:

'We are delighted to be joining the Carphone Warehouse team. We believe that
with the combination of The Carphone Warehouse and Opal we are now poised to
bring greater value to both the UK SME market and The Carphone Warehouse's
existing retail customer base.'

The total consideration comprises an initial consideration of £65m and further
potential consideration of up to £18m subject to the achievement by Opal of
specified EBIT targets. The acquisition is expected to be earnings neutral in
the year to March 2003 and earnings enhancing subsequently, before any
synergies.

50% of the initial consideration will be satisfied in cash and loan notes with
the remainder being satisfied through the issue of new equity subject to
lock-ups of 1-2 years. Any payments made in relation to the further potential
consideration will be payable in loan notes. In addition to the total
consideration, The Carphone Warehouse will assume average net debt of £25m.

The Carphone Warehouse was advised by Investec Investment Banking in the
acquisition of Opal.

For Further Information

The Carphone Warehouse Group PLC

Charles Dunstone                            07771 868 601

Roger Taylor                                07715 170 090

Tristia Clarke                              07771 868 601

For analyst and institutional enquiries     07909 907193

Roger Taylor

Peregrine Riviere

Citigate Dewe Rogerson                      07973 611 888

Anthony Carlisle



Investec Investment Banking

Russell Chambers                            020 7597 5114

David Currie                                020 7597 5138

Notes to Editors:


1.     
The Carphone Warehouse Interim Results

The Carphone Warehouse is today also announcing its financial results
for the 26 weeks ended 28

September, 2002. A separate press release gives detail.





2.     About Opal

Opal is privately owned and was founded in 1995. It was created in its current
form in December 1999, following a 1998 joint venture between Opal and Martin
Dawes' telephony reseller business. The company has grown rapidly and is now one
of the largest UK independent telecom network service providers, providing
carrier pre-select fixed line voice services to corporate customers, and
employing over 250 people. Opal owns 5 switches and leases modern fibre lines,
with 65 interconnects to the BT network. This enables Opal to operate at low
cost with high scalability and low capital expenditure, and to route over 90% of
its traffic with minimum interconnect and carriage payments to other network
operators.

Opal provides its services directly to companies and to telecom resellers and
dealers. In addition, it provides premium rate services and has formed strategic
partnerships based on long-term commercial relationships. It currently has
20,000 corporate customers including JCB, Hewlett Packard and Whirlpool.

Opal has been particularly successful in providing services to the expanding
call centre market through its range of added value products such as Call
Recording. Customers in this sector include Anglian Windows and NEXT Group plc.






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