Shares in Europe’s largest independent mobile phone retailer, Carphone Warehouse, dropped by around 10 percent this morning following reports that the firm may delay the demerger of its retail and telecom businesses until next year.According to a Reuters report, shares were also hit by the news that UK supermarket giant Tesco is to expand its mobile and fixed-line retail presence. According to an earlier report in the UK’s Sunday Telegraph newspaper, Carphone Warehouse will use a trading update and analyst day this week to tell investors it is committed to the demerger but not until the cost of financing improves – a situation not likely until 2010. 

Carphone Warehouse announced a strategic review of the situation last year, following its merger with US consumer electronics retail giant, Best Buy. The deal saw the firm retain 100 percent ownership of its existing fixed-line broadband businesses in the UK – which comprise the TalkTalk, AOL Broadband and Opal brands – which are now expected to be spun-off from the enlarged retail group, which is a 50/50 joint venture between the two companies. Meanwhile, the Sunday Times reported yesterday that Tesco plans to take on Carphone Warehouse’s dominance on the UK high street by opening more than 100 in-store shops selling mobile and fixed-line packages at its largest stores by next March. The retailer currently has around 40 such stores in the UK.