TalkTalk returns to customer growth but chairman says he wants to secure more broadband customers above all else
TalkTalk is prioritising customer growth in the consumer and business telecoms market ahead of short term gains after it added subscribers for the first time in several quarters.
Annual revenues fell by three percent to £1.78 billion and reported profits of £304 million were below expectations.
However TalkTalk noted high take up of its new offers, low customer churn and ongoing demand for business data and next generation voice services. Consumer superfast broadband is also double what it was a year ago.
It plans to continue targeting consumers with ‘value’ packages of landline, mobile, television and broadband services and sees opportunities raised by the legal split of BT Openreach and new dark fibre regulations.
Chairman Charles Dunstone, who returned as executive chairman at the start of this month as part of a management restructure, has warned that this growth takes precedence over other ambitions. He suggested investment in fixed infrastructure and customer service would mean less time for mobile
“I’m enjoying having a more ‘hands on role’ at TalkTalk and I’m very excited about the progress we have already made and the prospects for the business,” he said. “My focus for the company is growth, cash generation and profit – in that order.
“We will be smart about how we invest, focusing on our fixed network, avoiding other capital intensive distractions. In light of these new priorities, we have also decided to reset the dividend as we look to deliver growth and strong sustainable shareholder returns over the long term.”
“By rediscovering our DNA as a challenger brand with a single minded focus on our customers, we will continue to provide a service that is not only value for money but one that delivers quality, rewards loyalty, and treats all customers fairly,” added Tristia Harrison, TalkTalk CEO.
Harrison replaced Dido Harding as CEO in the management shakeup, while Charles Bligh was promoted from managing director of TalkTalk Business to chief operating officer.
Harding’s position came under particular scrutiny after the cyber attack, which cost the company more than £60 million in lost revenue and exceptional costs. More than 95,000 customers left the firm as a result and details of 100,000 customers were stolen.
The ICO slapped TalkTalk with a £400,000 fine for its negligence in failing to ensure there was sufficient protection in place, but Harding was praised for her decision to publicise the attack at an early stage and its crisis management.