Carphone Warehouse has called time on the slowdown in the mobile phone market, reporting "strong growth" in customer connection numbers.

The firm, Europe's largest mobile phone retailer, said that handset sales have again begun to accelerate.

The finding came only a month after Carphone Warehouse warned a drop of "up to 40%" in Europe's mobile phone market.

"We are confident that our retail marketplace has now established a firm level," company chairman, and former Orange boss, Hans Snook said.

Chief executive Charles Dunstone said: "Our results show a stabilising of the mobile phone market in general, and outperformance of the market by us."

Changing focus

Carphone Warehouse said last month that, in the year to the end of March, customer connections had remained static.

But the firm said that in the May to July period, sales soared by almost one quarter, with revenues up by 10%.

The rise came despite an increase in charges by mobile phone operators.

And Mr Snook reaffirmed Carphone Warehouse's drive to boost future profits by focusing on converting one-off customers into longstanding clients.

"We see potential opportunities to strengthen our position in the after sales service segments of our market," he said.

In the City, Carphone Warehouse shares initially climed on the report, adding 2.5p to 88p, before sliding to stand at 79p, down 6.5p, in afternoon trade.

The shares, floated at 200p two years ago, in May hit an all-time closing low of 66p.