Internet and phone provider TalkTalk
UK , Tiscali , Opal ) has released its latest Q3 financial (FY 2010/11) results, which saw its broadband ISP customer base decline by -25,000
from a total of 4,249,000 in the previous quarter to 4,224,000
now. It had previously managed to add +18,000 new customers during Q2.
The move is significant and reflects some of TalkTalk's many problems, most of which hit during the last half of 2010. The ISP is under pressure from Ofcom
over bad billing practices
) and an investigation into whether or not it mis-sold its fixed line phone services
). Not to mention the Tiscali email migration woes
and concern over their tracking of customer website visits
By contrast TalkTalk
itself claims that the decline mainly reflects "continuing churn in the former Tiscali base
", as the network and systems migration processes continued to create disruption for some customers. Indeed most of the lost customers have come from their Tiscali side, with TalkTalk
itself still being in positive territory.
Dido Harding, Chief Executive of TalkTalk, commented:
"We have made a good start implementing the new strategy we announced in November last year, focusing on simplifying our business, improving our operating margins, and delivering value for money products and services for our existing customers.
We successfully completed the last major milestone in our One Company integration programme at the end of January, migrating former Tiscali customers onto our core billing system, ahead of schedule. The integration programme has caused some customer disruption, but provides a strong platform for us to deliver a better experience for all our customers, and enables us to drive further operating efficiencies across the whole business.
Unbundling our customer base is ahead of target and the next phase of our network buildout is already under way. We have now initiated a major reorganisation that will simplify our business and deliver material operational efficiencies. Our operating performance in the third quarter was in line with our expectations and we remain on track to deliver our full-year guidance."
Presently 85% of TalkTalk's broadband customers are using the groups cheaper unbundled ( LLU
) platform (up from 81% in Q2), which covers over 80% of the UK population. TalkTalk
is currently rolling-out its network to an additional 700 exchanges, which will make the service available to 93% of the population
. Some 55 of the 700 exchanges are already under way.
The good news is that TalkTalk
claims to still be "on track
" with its quad play ambitions, despite concern that its TalkTalk TV
service might be delayed due to internal squabbles and technical problems within the YouView
camp. It has also pledged to improve its mobile offering and market the service "more actively [with] our fixed line customer base
On top of that TalkTalk
is about to launch its new FTTC
based "Fibre Bradband Boost
" add-on for existing customers, which will give them download speeds of up to 40Mbps. In addition to this they've just announced a new deal with BSkyB ( Sky Broadband
) to trial their own 100Mbps fibre optic FTTH
TalkTalk FTTH Trial
To better understand the technical and commercial aspects of the next stage of the planned BT
Openreach fibre roll-out, which will be based on fibre-to-the-home (FTTH), we have entered into a shared research and development project with BSkyB to deploy a small-scale FTTH
network to 3,600 homes in North-West London.
This project will allow us to input constructively into the Openreach FTTH
programme, gaining insights into potential service offerings, set-up processes, usage patterns and costs to deliver. The project costs are being shared between the two companies and are not material.
The latter news bodes well for the future, although most customers tell us that they would prefer it if TalkTalk
refocused upon improving customer service and quality. This would at least patch up the Tiscali bleed and give them room to focus on developing new services without risking further harm to their reputation.
Today's results also push TalkTalk
down one place in our Top 10 ISPs By Subscriber Size
table, which makes Virgin Media
the second largest broadband provider once again.