Charles Dunstone: Broadband wizard

Carphone Warehouse's free internet service sent its phone lines into meltdown last week. Naturally, its bachelor boss was pleased. But, as he tells Julia Stuart, finding a wife is what would make him really happy

Charles Dunstone (PA)

There is considerable rigmarole to endure before getting inside the head office of Carphone Warehouse. Once admitted through a high-gated turnstile in the perimeter fence of an industrial park in Acton, a grim corner of west London, my photograph is then taken by a stony-faced receptionist. The last time my identity was under such scrutiny was at Islamabad airport.

After yet another security gate, the building - genuinely a warehouse - immediately opens up into a huge noisy call centre, where hundreds of employees wearing headsets have done their utmost to personalise their desks. Off to one side, with its glass sliding doors wide open, is the unremarkable office of the chief executive and co-founder of Europe's biggest mobile-phone retailer. He also happens to be one of the most eligible bachelors in Britain.

Charles Dunstone, a shortish, affable chap, sits on a leather armchair, his thighs swinging in and out as he moans about the security system, which I haven't even mentioned. "It's a ridiculous business that we now take your photo at our desk. What's all that about? It's an unnecessary expenditure and a waste of time," says the 41-year-old.

Didn't he agree to it? "No! They don't come and ask me about all that kind of stuff. It just irritates me. We haven't even got a stock of mobile phones here. I don't know what they think people are going to do. That's the sort of thing that happens in big companies that are out of control," protests Mr Dunstone, who famously set up the business at the age of 25 with £6,000 savings.

But what sends the entrepreneur's thighs flapping even more violently - this time with glee as well as irritation - is what has happened since his company announced a free broadband service to its phone customers, the first offer of its kind in Britain. The stampede was such that at one stage last week there were 40,000 hits a minute on the company's website, which subsequently crashed.

Things like that drive him "nuts", he says. "I don't get angry, I just get down, it just eats me up." Halfway through our chat, Dunstone nips up to record a message for the 150-odd customers waiting to get through on the phone at any one time - despite more than 1,000 people taking the calls, advising them to access the service through the newly restored website.

"We're only 24 hours in, so it's been frantic. Absolutely mad. We will sign up five times more customers than our target was on the first day. It's quite extraordinary," says Mr Dunstone, admitting that he feels "excited and daunted".

The businessman, who hopes that Carphone Warehouse will become the No 1 alternative to BT, expects to lose £50m this year because of the subsidy it is putting into connecting people on to the service, and not be back to making an overall profit until the end of the third year. "Underlying it is giving something to people that they want at the best price we possibly can, hoping that we get their loyalty and hoping that over time if they are loyal to us we will make our money back," he explains.

Mr Dunstone is loath to talk about his humble beginnings. "Matthew Freud [the PR man] says he's going to resign my account if I talk about my £6,000 and the flat again," he mutters. However, his arm is easily twisted. After leaving Uppingham School with three A-levels, Mr Dunstone went on to become a sales manager for the mobile-phone division of NEC. He noticed that the company was mainly supplying big corporate users, and realised that the people who really needed mobiles were small businesses and the self-employed, such as plumbers.

In 1989, he and co-founder David Ross (now the company's deputy chairman) set up the business in a flat in Marylebone, central London. The business now has more than 1,700 outlets in 10 countries. He puts his success down to being in the right place at the right time and continually striving. "I don't think there's a sense in this place that the world owes us a living, and I think in lots of organisations you do get that," he says.

Despite his enormous success, there are occasions when he feels washed over by an unexpected wave of fear. "I worry about things. Sometimes when I'm under pressure I just get frightened. I can't tell you why. I suddenly feel nervous. That's probably stress, I guess. But it goes."

With the success, of course, has come untold wealth. Has it brought him happiness? "I don't think it does bring you happiness, but it does lead to you having a more comfortable lifestyle. But it doesn't change your life. You couldn't call it an ordinary life, but I don't live a mad life."

There's a five-bedroom, four- storey house in London's Holland Park, complete with housekeeper, another charming five-bedroom, flint affair in Norfolk and two yachts, one of which he races. He doesn't do flash, preferring to drive a Range Rover, buy his clothes from Marks & Spencer and shop at Tesco. "I'm not really that wealthy," he protests. "I'm wealthy if you add up the Carphone Warehouse shares that I own on paper but I can't really sell them. It's not like I can sit and look at a bank account of a pile of money."

He insists that his salary is small compared to others in a similar position. "I keep getting beaten up by our non-executive directors because it's very low for a chief executive of a company of this size."

How much is it? "I don't know - £350,000, £400,000, something like that. It sounds a lot but if you look at what I should be paid if I was just a normal employer it would be like £800,000."

Why doesn't he pay himself more? "Because I own the shares in the business and I don't want it to look to our other shareholders like I'm picking their pockets by paying myself too much. I want it to look OK to the rest of the company."

On a Friday night he likes nothing better than to go to the River Café with friends for chargrilled wild salmon and bottle of good French wine. He loves the fact that he can walk anywhere and not be recognised. Weekends are spent working, doing errands, sailing or seeing his friends. He counts the Prime Minister as one of them, though he has never contributed to the Labour Party, partly because he fears it might put off anti-Blair customers.

There is, however, one goal that eludes him. "I would like to be married and have kids but I probably put an unequal balance of my life into my work rather than my private life," he says. "I've had lots of girlfriends, but I've not found the person who thought I was the right one nor have I thought they were right. I thought by the time I was 40 I ought to have done something, and now that I'm 41 and I haven't, it does prey on my mind. I've got a niece and nephew and they're fantastic. You think of having kids of your own and you don't want to be a really old dad."

THE BOTTOM LINE

Charles Dunstone has amassed an estimated personal fortune of £780m.

Over the past five years, the company's sales, profits and earnings have all roughly doubled, as has its share price.

This year Carphone Warehouse came sixth in a poll of the 100 best companies in Britain to work for. The 77 per cent score for staff thinking that the boss was doing a great job was the highest.

Staff who get married or have a baby are given £200. Employees are given the day off on their birthday and are sent a cake. On the last Friday of every month the company pays for its staff to go out for a drink.

If Carphone Warehouse succeeds with broadband, it could more than double in value again and become Britain's most valuable retailer.