Data Breach And Reliability Issues Cause TalkTalk Customers To Leave

Figures from Kantar suggest recent events at TalkTalk have had an impact on customer retention and acquisition in the communications market

The reputational damage suffered by TalkTalk as a result of last year’s major data breach and ongoing reliability issues have sabotaged the company’s attempts to steal market share from its rivals, according to the latest figures from Kantar WorldPanel ComTech.

The research firm says TalkTalk’s share of the home communications market fell by 4.4 percentage points in attracting new customers during the fourth quarter of 2015, while just 1.4 percent of those who joined the provider cited reliability as a pull factor.

This was compounded by the fact that seven percent of existing customers left TalkTalk during the same period, with a fifth saying unreliability was a factor in their decision.

TalkTalk woes

TalkTalk SIMTalkTalk has made significant gains in recent times, especially in the television market, thanks to its ‘no frills’ range of services. However analysts suggest recent events have taken its toll on the firm’s public perception, even after free upgrades were offered to customers in the aftermath.

“TalkTalk continues to offer some of the most attractive promotions across the home services market and almost a third of its new customers did choose it for this reason, but there can be no doubt that it lost potential customers following the major data hack. If it’s to recover from recent events TalkTalk will need to offer more than just good value,” explained Imran Choudary, consumer insight director at Kantar.

The scale of the assault was less than originally feared, but 1.2 million email addresses, names and phone numbers were stolen, as were 21,000 account numbers and sort codes and 28,000 partial card details. However, TalkTalk is adamant that the data stolen is not sufficient for the attackers to steal money.

Communications battle

And, only last week, many customers complained that the dial tone on their landline had gone missing, leaving them unable to make or receive phone calls. Furthermore, Ofcom’s recent customer service survey found TalkTalk finished bottom in the landline and broadband categories.

Kantar said BT was the main beneficiary of this exodus, with two fifths of TalkTalk deserters joining the company, and remains the largest broadband player ahead of Sky, which in turn is the dominant force in pay TV.

Virgin Media made small gains in broadband, but its share in the television market fell by 6 percentage points during the period. Kantar also noted that some smaller brands, like Plusnet, did make gains at the value end of the market.

According to BT’s most recent results, published in October, BT has 7.9 million broadband customers with other operators on the Openreach network, such as EE, Sky and TalkTalk, accounting for another 11.7 million. Virgin’s November results indicated it had 4.6 million broadband users.

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