Carphone Warehouse chief executive Charles Dunstone has confirmed that it is interested in acquiring Tiscali’s UK arm, in a move that could see it become the country’s largest broadband supplier.

Carphone Warehouse is the UK’s third biggest supplier of broadband, with 2.6 million customers, while Tiscali UK is in fourth place.

Dunstone has also launched a broadside against BT’s plans to increase the fees that UK broadband suppliers pay it to use landlines running to customers’ homes.

Dunstone said he was opposed because of BT’s poor performance in handing over control of landlines to Carphone Warehouse in the past.

Any rise in the amount that rivals have to pay BT could affect the profitability of Carphone Warehouse badly or, alternatively, it would have to pass on the rise to customers.

Telecoms regulator Ofcom is expected to start consulting on whether to allow BT to increase fees to rivals next month.

Carphone Warehouse is likely to report at its fourth quarter trading update tomorrow that it has hit its guidance that its TalkTalk free broadband business has achieved an estimated operating profit of£15 million to£30 million in 2007/2008.

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