People are spending more on their mobile phones

The retailer saw revenues through its stores increase by 25% to �355.8m in the 13 weeks to 25 December.

The chain's mobile phone customers rose 23% to more than two million, while buyers paid more per purchase, buying the latest generation mobile phones.

Carphone said it was positive about future trading and expected to exceed profit forecasts for the full year.

Upbeat projections

"Our stores traded well and we achieved like-for-like growth despite an excellent Christmas last year," said chief executive Charles Dunstone.

We expect the migration of customers to 3G platforms to gain significant momentum in the second half of the calendaryear Carphone Warehouse Check Carphone's share price

"Looking ahead we believe market conditions will continue to play to our strengths."

Carphone said it was particularly optimistic about the number of customers who will upgrade to the latest 3G video mobile phones in 2005.

"We expect the migration of customers to 3G platforms togain significant momentum in the second half of the calendaryear," it said.