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TalkTalk Loses 50,000 Customers In Three Months

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 may have raised its profit forecasts but it has failed to stem the haemorrhaging of subscriber defections

TalkTalk has lost customers for the fifth successive quarter, falling further behind rivals BT and Sky.

Fifty thousand customers defected from TalkTalk in the three months leading up to December, the company has reported, bringing the total number of customers it has lost since November 2010 to 170,000. However the ISP’s share price rose by nine percent after it raised its profit forecast.

Mass defections

The defections see TalkTalk’s total number of subscribers drop to 4.08 million, affecting its plans to expand its customer base in the last few months of 2011.

The company, formed through the mergers of Tiscali, Pipex and Carphone Warehouse lost 25,000 subscribers to rival providers in the same quarter last year due to problems with migrating Tiscali customers onto its billing system .

It incorrectly billed around 62,000 Tiscali customers for services they never received andwas fined £3 million by Ofcom last August. Its customers were also found to be “the most likely to change providers” after it finished bottom of an Ofcom broadband customer survey.

Despite these setbacks, TalkTalk’s full year underlying earnings are expected to be between 18-19 percent of revenues, an increase from the previously expected 17-18 percent and an improvement on last year’s 15.6 percent margin.

Revenues increased by £1 million from the second quarter to £422 million, but still down by five percent from last year. However the business is becoming more profitable as the average revenue per user increased to £25.30 from £24.70 from the last quarter.

TalkTalk may attract customers who want a greater say in what their children view on the Internet after it announced yesterday that new users would have to make a decision whether or not to enforce parental controls before their broadband is activated.