Home
 » ISP News » 
Sponsored Links

UK ISP TalkTalk Confirms Plan to Sell BT Based Broadband Subscribers

Friday, May 16th, 2014 (7:56 am) - Score 1,469

Internet and phone provider TalkTalk has identified the sale of its off-net broadband subscribers (BT IPStream based) to another ISP as one of several “major initiatives” that will help to “unlock further significant savings” over the next two years. The move is expected to impact the bulk of their 136,000 off-net Internet customers, most likely excluding the few that are managed on behalf of the Post Office.

The development was revealed in yesterday’s quarterly financial results announcement (here), although only the eagle-eyed would have spotted the singular mention hidden deep within their full report. In that report, TalkTalk noted that its off-net based comprised 136k broadband subscribers (down from 151k in Q4-2013) and 282k BT-based voice line customers (down from 297k in Q4-2013).

Advertisement

The full year revenue from all of TalkTalk’s off-net services was £128m, which represents a decline of -28% from £178m last year. In quarterly terms, off-net revenue was £30m and that is down from around £40m a year ago. As for ARPU, off-net brings in £23.09 versus £26.93 on-net. The off-net decline also contributes to the ISPs 1.5% churn rate.

Sadly TalkTalk doesn’t offer a breakdown of off-net revenue for just broadband, although it’s well known that the costly old BT-based platform has never been as much of a money spinner as their fully unbundled (LLU) network. On top of that the constant off-net decline tends to cast a repetitive shadow over TalkTalk’s financial reports.

TalkTalk’s Quarterly Results Statement

Looking forward, we expect the four main programmes to drive a number of major initiatives in FY15 that will unlock further significant savings through FY16 and FY17. In terms of Getting Customers Current, we plan to sell our off-net IP Stream base, rebrand our AOL base and significantly reduce the number of consumer and B2B tariffs. Our systems transformation will focus on a significant enhancement of our CRM systems and upgrading our billing platform.

We will be leveraging our customer data to enable better targeted marketing activity. There will be significant focus on improving our online customer journeys to further encourage our customers to self-serve to both reduce cost and improve customer experience. These initiatives are expected to contribute towards further cumulative savings of over £40m by FY17.

In TalkTalk’s mind their cheaper and more cost effective unbundled broadband network can now reach more than 95% of the United Kingdom and so booting off the most costly (operating expenses) final 5% is seen as a good way of making their balance sheet and growth look more attractive to the market. It may also make more money to sell them now than to hold on until they’re all gone, especially as they’re unlikely to grow LLU coverage much further. Virgin Media seems to have a similar plan for its BT-based Virgin National (ADSL) customers (here).

But who will buy it? According to a related report, telecoms analyst STL Partners has valued TalkTalk’s off-net subscribers at less than £10m so they’re not worth much. Clearly Virgin Media won’t have any interest and Sky Broadband also has a similarly costly off-net base, although they’re not bleeding anything like as aggressively as TalkTalk or Virgin Media.

Advertisement

Outside of those the only operators with enough clout to safely consider it would be BT itself (makes the most sense) and possibly EE, although the latter has a BT managed network. But at such a meagre value it’s not impossible that one of the better quality medium sized ISPs, such as Eclipse Internet or Zen Internet, might consider a sniff.

Mark-Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and .
Search ISP News
Search ISP Listings
Search ISP Reviews

Comments are closed

Cheap BIG ISPs for 100Mbps+
Community Fibre UK ISP Logo
150Mbps
Gift: None
Virgin Media UK ISP Logo
Virgin Media £22.99
132Mbps
Gift: None
NOW UK ISP Logo
NOW £24.00
100Mbps
Gift: None
Vodafone UK ISP Logo
Vodafone £24.00 - 26.00
150Mbps
Gift: None
Plusnet UK ISP Logo
Plusnet £25.99
145Mbps
Gift: £50 Reward Card
Large Availability | View All
Cheapest ISPs for 100Mbps+
Gigaclear UK ISP Logo
Gigaclear £19.00
300Mbps
Gift: None
Community Fibre UK ISP Logo
150Mbps
Gift: None
Virgin Media UK ISP Logo
Virgin Media £22.99
132Mbps
Gift: None
Hey! Broadband UK ISP Logo
150Mbps
Gift: None
Youfibre UK ISP Logo
Youfibre £23.99
150Mbps
Gift: None
Large Availability | View All
The Top 15 Category Tags
  1. FTTP (6035)
  2. BT (3643)
  3. Politics (2722)
  4. Business (2442)
  5. Openreach (2407)
  6. Building Digital UK (2331)
  7. Mobile Broadband (2150)
  8. FTTC (2084)
  9. Statistics (1908)
  10. 4G (1822)
  11. Virgin Media (1769)
  12. Ofcom Regulation (1586)
  13. Fibre Optic (1470)
  14. Wireless Internet (1463)
  15. 5G (1411)
Promotion
Sponsored

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms , Privacy and Cookie Policy , Links , Website Rules , Contact
Mastodon