Trying to stop people sharing copyrighted material over the internet is a game of cat and mouse in which the pirates will always win and calls for internet service providers to halt illegal file sharing are "naive", according to the boss of Carphone Warehouse.

Instead, Charles Dunstone said, the solution is education about the benefits of respecting copyright coupled with services that allow consumers "to get content easily and cheaply".

Speaking after the company announced a jump in annual profits and plans to split its TalkTalk broadband business from its retail stores by July of next year, Dunstone said people had become "obsessed" by peer-to-peer file sharing but "there is a myriad of ways that you can share content on the internet".

"If you try speed humps or disconnections for peer-to-peer, people will simply either disguise their traffic or share the content another way. It is a game of Tom and Jerry and you will never catch the mouse. The mouse always wins in this battle and we need to be careful that politicians do not get talked into putting legislation in place that, in the end, ends up looking stupid."

His comments come before the publication of Lord Carter's final Digital Britain report this month. The communications minister has made protecting the UK's creative industries from the online piracy one of his key aims and he has promised legislation to back up his proposals. Under a government-brokered deal last year some ISPs sent letters to persistent illegal file-sharers warning them that their actions could result in legal action by media companies and that process is expected to be codified by the new legislation.

The music industry has long maintained that internet service providers (ISPs) must work harder to prevent their customers from engaging in online piracy. More recently, the film and television industry has called for ISPs to introduce "speed humps" that would slow down the connections of persistent illegal file-sharers and pop-up warnings on known file-sharing sites. Many in the media industry have taken heart from the recent Pirate Bay trial in Sweden that saw the four founders of the site, which did not host pirated material but made it easier for people to find copyrighted material, given prison sentences and a hefty fine.

But TalkTalk has always maintained the defence that it is merely a broadband pipe and not an online policeman for the content industry. Dunstone said any technical measures to try and clamp down on sharers of copyrighted material would soon be bypassed by pirates.

"If people want to share content they will find another way to do it," he said. "It is more about education and allowing people to get content easily and cheaply that will make a difference. This idea that it is all peer to peer and somehow the ISPs can just stop it is very naive."

Carphone Warehouse announced annual pretax profits of £133m, up from £4m last year, and set out a timetable for the planned demerger of TalkTalk from its retail business, which it last year spun into a joint venture with US electronics retailer BestBuy. Dunstone hopes to have the demerger completed by March, although that may slip to July if the company is unable to get all the necessary paperwork sorted in time.

Carphone Warehouse's results were in line with analysts' expectations for its TalkTalk operation, which last month acquired rival Tiscali to become the UK's largest player, seeing revenue dip to £1.38bn from £1.4bn but profits rise as it moved more people onto its own network. The retail business, meanwhile, increased revenues to £3.56bn from £3bn but the recession has forced the company to offer better deals to mobile phone customers so profits before financial charges dropped to £188m from £217m.

Dunstone, however, said high street traffic had held up well in recent months. "We all thought after Christmas, having seen what happened in October and November, that it was going to be the end of the world. That has not happened – the consumer has been more resilient than people had imagined. They are demanding very good value, so you have to be very sharp on price and deals, but it has been OK."

The mobile phone market in the UK has polarised since last autumn with customers choosing to take a smartphone, which can play music and access the internet, or cling to their existing phone in order to qualify for a cheap SIM-only deal.

Carphone Warehouse has benefited from being the only independent stockist of the most desirable smartphone – Apple's iPhone – which is available only on the O2 network in the UK. But Dunstone said as the year progresses there will be a number of new "must have" handsets that should persuade SIM-only customers to take a new phone.

"The team are very excited about the product pipeline – they think there are going to be more products coming out that are going to drive people into the marketplace than we have seen in the last six months," he said.

New devices include the N97 from Nokia, out next month, and the Palm Pre, which will be in the UK in time for Christmas.

But he refused to comment on intense speculation that a new version of the iPhone will be unveiled at Apple's worldwide Developers' Conference on Monday, saying: "It is more than my life's worth to ever say anything. They keep us terrified."

TalkTalk is testing BT's new fibre-optic super-fast broadband network in north London with a view to rolling out even faster services. BT has pledged to spend £1.5bn over the next three years putting a super-fast network within the reach of 10m UK households.

"What BT want to be sure of is that there will be enough customers to use it after they have built it," said Dunstone. "So, although we have not talked in any detail about it, I can imagine a situation where we would give some kind of an undertaking as to how many customers we would buy for, so they can be certain when they started digging the roads up that they will be able to get enough users to pay for it.

"If we can get enough people to take it up it will be cheap enough that a lot of people will take it up but the danger is it that it is very, very high priced and very few people take it."

Dunstone reckons super-fast broadband – offering speeds of up to 40Mb a second – will be more expensive than current-generation broadband but less than the sort of £39.99-a-month prices being asked for basic broadband a few years ago.