Study Claims TalkTalk Suffered 200-300K Customer Exodus After Attack

The next set of financial results from TalkTalk aren’t due until 2nd February 2016, but that hasn’t stopped a new Kantar Worldpanel report from predicting that the ISP may have lost up to 7% (200,000 – 300,000) of its broadband base in the final quarter of 2015 after last October’s Cyber-Attack.

It’s fair to say that last year was full of dramatic developments for TalkTalk, not least with the sale of their off-net subscribers and other customer movements resulting in their total broadband base declining to around 4.1 million in Q3 2015 (here).

Sadly the situation only got worse when the ISP was hit by a major Cyber-Attack during the final quarter (here), which certainly could have been handled better and was the second such incident to strike the provider inside a little over one year. Needless to say that many people have since jumped ship.

Imran Choudhary, Consumer Insight Director at Kantar Worldpanel, said:

“Customers have lost faith in TalkTalk as a trustworthy brand. The provider saw its share of the home services market fall by 4.4 percentage points quarter on quarter in terms of new customers, only 1.4% of whom gave reliability as a reason for joining the provider in the last three months – well below the market average.

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.”

Choudhary goes on to specifically claim that the ISP lost 7% of their existing broadband base during Q4 2015, which has yet to be confirmed by TalkTalk’s official results. By our estimates that would reflect a maximum decline of around 287,000 subscribers, which could indeed be a monumental loss and is going to sting given that the financial impact of the Cyber-Attack alone has been estimated at £30-35m.

Mind you there’s plenty of room for scepticism because the Kantar Worldpanel study bases its claims on a panel of around 15,000 consumers, which may or may not reflect the market. On the other hand even half the predicted decline would still represent very bad news for TalkTalk.

Needless to say that TalkTalk’s next set of results, which are due out in February, could make for a very interesting read. We have reached out for comment and are awaiting the ISP’s reply.