Carphone Warehouse has said 340,000 customers have signed up to its new broadband offer, beating expectations.
Carphone Warehouse attracted customers to its "free broadband"
It said it had signed up more customers in the eight weeks since the launch than planned for the first four months.
The news came as it unveiled a 36% rise in pre-tax pre-exceptional profits to £136.1m for the year to 1 April.
However, after costs such as the integration of the Onetel business it bought in 2005 are included, profits fell 12% to £81m.
Annual sales rose by 29.4% to £3bn, and the firm said it was hoping to attain 15% growth in mobile subscriptions this year.
The take up of the firm's broadband offer was "much bigger than expected", Charles Dunstone, the firm's chief executive, told the BBC.
"Twice as many people as expected applied," he said.
However, this unexpected rise had caused a "hiring strain" on call centres as it takes weeks to hire new operators, said Mr Dunstone.
"We have strained to cope with the calls and e-mails," he said.
"The challenge is in the execution and the ability to meet service expectations," said Richard Ireland, UK head of telecoms at Ernst & Young.
By 5 June 340,000 customers had signed up. Of these 240,000 customers already had their line rental set up and were receiving calls, and a further 100,000 had this service as well as broadband.
"We have connected more customers in the first eight weeks than we had planned to do in the first four months" said Mr Dunstone.
Customers using the phone operators' TalkTalk service can make unlimited local and national calls from their home phone for £20.99 a month.
The package includes a broadband internet connection and unlimited calls to 28 countries.
Carphone Warehouse is expected to make a loss of £50m on the business this year, but hopes to make a £40m profit by 2008.
By then the firm also plans to have paid off the start-up costs for the service, estimated at £110m.
By joining up to the service, TalkTalk customers will no longer have to pay BT's line rental charge, but will pay a one-off connection fee of £29.99.