A SPONSORSHIP deal with ITV’s hit show X-Factor helped Carphone Warehouse’s TalkTalk broadband business add another 36,000 customers in the third quarter, the group has revealed.

And it increased its full-year forecasts for the second time in two months, helped by the increase in new broadband customers, which was also boosted by its takeover of Tiscali’s UK operations.

Carphone, which is splitting its TalkTalk business and Best Buy Europe retail joint venture into two companies, said it now expects year-end broadband customers at the top end of its guided range, at between 4.1m to 4.2m.

It also upped guidance for its share of Best Buy Europe’s net income to between £40m and £45m after a 5.5% rise in like-for-like sales for the three months to December 31.

TalkTalk, which employs about 1,000 staff at its Warrington call centre, now has 4.15m customers, thanks in part to the group’s official sponsorship of hit talent show The X-Factor.

The telecoms arm became the UK’s second-biggest broadband provider, behind BT, after snapping up Tiscali following the acquisition in July, 2009. Carphone, which aims to spin off TalkTalk by the end of March, said customer growth for the TalkTalk brand was offsetting a decline in the Tiscali customer base following the deal.

Around 20,000 former Tiscali customers are quitting each month, although the group said it expected the number of leavers at this level.

At Best Buy Europe, UK like-for-like sales were up by 6.3% due to strong demand for “high-end” handsets such as the iPhone.

The company said its first Wireless World outlets – providing a wider range of products and in-store technical support services – were performing well and that it was targeting more than 100 outlets by March, 2011. This will be achieved though a mixture of new stores and refurbishments.

The UK retail business is a joint venture with US consumer electronics giant Best Buy.

Keith Bowman, equity analyst at Hargreaves Lansdown stockbrokers, said a cautious outlook statement and the bounce back in fortunes at Currys owner DSG International were areas of concern for Carphone.

However, he added: “The sharing of ‘best practices’ between Carphone and US partner Best Buy is likely to be providing strong momentum, while the more general move to services online is a factor playing into the group’s hands.”