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TalkTalk Loses More Broadband Customers But Makes Fibre Gains

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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TalkTalk’s cyberattack hangover continues but revenues largely flat and company is optimistic about York FTTP pilot

TalkTalk’s hangover from a major cyberattack last year is not quite over as its broadband user base fell by 9,000 year on year, but the number of fibre customers on its network rose by 36,000 by the same metric and premises covered by fibre to the premise (FTTP) in York reached 11,000.

The company has not released specific figures for its first quarter – these will likely arrive in November when the first half of its fiscal 2017 ends – but it has been has been haemorrhaging customers ever since the incident.

TalkTalk confirmed the attack caused 95,000 subscribers to leave the company in the immediate aftermath and cost it up to £60 million in lost revenue and exceptional cost. Profits for its financial 2016 fell from £72 million to £2 million and customers fell from 4.17 million in 2015 to 3.996 million.

Revenues

TalkTalk FTTP (1)Revenues for the first quarter were flat despite a lower customer base (23,000 TV customers have also left in the past 12 months), but corporate revenues rose by 7.5 percent and data by 28.5 percent, helping to offset voice income which fell by 31 percent during the period.

TalkTalk Business added 2,000 new Ethernet lines and there were gains for SIP voice too. The division also plans to offer 4G services to business customers and all users will be moved from Vodafone’s network to O2 by the end of the financial year as per its new Mobile Virtual Network Operator (MVNO) agreement with the latter.

“We are very pleased with how the year has begun,” said CEO Dido Harding, whose role came under scrutiny in the aftermath of the cyberattack. “Revenue growth was level year on year despite a smaller customer base and churn was down year on year as we drove growth in mobile and fibre, and delivered real improvements in our customers’ experience.”

TalkTalk FTTP York

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TalkTalk FTTP (7)

York FTTP

The York FTTP network is a joint-venture between TalkTalk, Sky and CityFibre and the model could be exported if certain targets are met – such as the cost of connection being below £500 per premise and penetration reaching 30 to 40 percent.

TalkTalk says it is on track to achieve this as current penetration is 12 percent, less than three and a half months after ‘TalkTalk UFO’ launched commercially.

During a tour of York this year, TalkTalk confirmed to TechWeekEurope it had plans to cover 60 percent of the UK population with FTTP if the initial project was a success.

“We have continued to make good progress with our fibre to the premise trial in York,” boasted Harding. “Nearly 11,000 homes have now been passed by the build, with total penetration circa 12 percent after just over three months.

“TalkTalk connections have been strong, with nearly half of those signing up new to TalkTalk and we are excited about the potential this demonstrates to build a scale network across the country in the future.”

Quiz: What do you know about fibre broadband?