The Irish arm of mobile phone retailer The Carphone Warehouse plans to increase its number of outlets from 35 to 45 over the next 12 months.

The expansion follows a difficult two years for the company, which revealed yesterday that it lost €1.17 million in the year to the end of March 2004 in the Republic.

Mr Stephen Mackarel, Carphone Warehouse Ireland chief executive, said margins had been tough over the past two years as there had been little competition in the mobile market. But he said the entry of Hutchison 3G Ireland into the market in June or July and the expansion of Meteor would increase margins in 2005.

"We expect Hutchison to enter the market in June/July and for this Christmas to be a huge marketing opportunity for them," he said. "We reckon they will offer calls for half the price of the current operators and offer handsets at prices up to €200 cheaper."

A spokesman for Hutchison 3G Ireland declined to comment on the company's Irish launch date,except to say it depended on network roll-out.

The Carphone Warehouse is planning to cash in on the entry of a fourth operator in the mobile market. Mr Mackarel said The Carphone Warehouse would probably be one of Hutchison's biggest outlets in the State because of mobile retailers' difficulty getting access to shopping centres because of exclusive retail deals being negotiated with the two big players.

The company, which offers fixed line and mobile telecoms services in Britain, is considering offering these types of services in the Republic. But Mr Mackarel said no launches were imminent and he thought there might be a long delay before "virtual operators" entered the market.

The Carphone Warehouse Ireland's financial accounts for the 12 months to the end of March 2004 - filed recently at the Company's Registration Office - show the company made a pre-tax loss of €1.17 million, an improvement on the loss of €2.8 million reported in 2003. Retained losses at the firm increased to €6.8 million at March 27th, 2004, up from €5.6 million a year earlier.

Despite the difficult year for the mobile phone retailer, annual turnover increased to €40 million, up from €29.8 million.

The Carphone Warehouse employs 215 people in the Republic. It also employs staff at its direct sales department, which sells handsets over the telephone.

Mr Mackarel said the company would increase its mobile phone repair operations at its stores. This was important because of the introduction of more expensive mobile handsets as new technology was introduced.

The average cost of a prepaid mobile handset sold by it is €129. The average cost of a contract phone is about €129.