» ISP News » 

UK ISP TalkTalk Confirm Loss of 101,000 Subscribers After Cyber-Attack

Tuesday, February 2nd, 2016 (7:43 am) - Score 942

As feared last year’s cyber-attack (here) had a significant impact upon TalkTalk, albeit not nearly as big as some had predicted (here), with today’s vague trading update reporting that the ISP’s on-net subscriber base declined by -101,000 during the final quarter of 2015 (calendar).

The ISP’s reputation was hit hard by last October’s attack, which exposed a significant number of customers and their personal details to abuse by hackers. The situation might not have been so bad had the provider not also suffered two very similar prior incidents, including one in 2014 that they were infamously slow to confirm.

TalkTalk had previously estimated that the financial impact of the Cyber-Attack alone could be £30-35m, although today’s extremely vague trading update (the ISP now only publishes two detailed reports every year) gives us some fresh detail. Sadly we don’t get a full breakdown of subscribers and won’t see that until the Q1 2016 (calendar) results.

TalkTalk’s Cyber-Attack Impact (Financial)

As a result of a c£15m trading impact arising from Q3 disruption (higher churn and foregone revenues, offset by SAC savings on lower connections) and a c£20m impact from the lower customer base with which we entered Q4 and reprioritisation of certain Making TalkTalk Simpler activities, we now expect FY16 EBITDA of £255m – £265m.

The exceptional costs of restoring our online capability with enhanced security features, associated IT, incident response and consultancy costs, and free upgrades, are expected to total £40m-£45m.

Since then a number of individuals have been arrested in connection with the attack and a separate security review also resulted in the arrest of several people at TalkTalk’s outsourced Wipro call centre in India (here), where three customer service agents were found to have abused private customer details in order to con people out of money.

At the same time TalkTalk has also been slowly improving the security of their website and they’ve also offered a lot of free incentives (here) to their existing subscribers in an effort to appease concerns. Apparently this was well received: “The unconditional free upgrade offer that we made available to all customers drove high levels of engagement with a 14% (489k) take-up rate, improved trust in the brand (+14%), and increased brand consideration (+22%).”

Dido Harding, CEO of TalkTalk, said:

“It is encouraging to see the business returning to normal after a challenging quarter that was dominated by the cyber attack. Our customers have responded well, with almost half a million customers choosing to take up our unconditional offer of a free upgrade.

Both churn and new connections recovered during December and January and independent external research has revealed that customers believe that we acted in their best interest. In fact trust in the TalkTalk brand has improved since just after the attack and consideration is higher now than it was before the incident.

Looking forward, we expect to deliver a material step up in profits in H2, with full year results in line with market consensus. With a renewed focus on our existing customers and the benefits of our transformation programme, we expect to deliver a further material improvement in profits in FY17. As the value for money telecoms provider we are well placed to benefit from the current regulatory reviews in the sector and expect to see quad play driving sustainable long term growth.”

Aside from that TalkTalk also reported “strong volume growth in Fibre [FTTC]” (+54,000) and more “modest growth” in Mobile (+13,000, excluding SIMs taken up as part of the free upgrade offer).

However we also note that some of TalkTalk’s subscribers had wanted to leave after the cyber-attack, but were prevented from doing so due to still being held under contract. As such we perceive that there could be a longer term threat via customer bleed (churn) as contracts come to an end, although such things usually heal with time.

Leave a Comment
11 Responses
  1. Avatar FibreFred says:

    At least dido is upbeat about it I wonder if she believes her own spin

  2. Avatar Vince says:

    As predicted, it isn’t anywhere near as bad as the analysts suggested.

    Plus there is no way to know how many left due to the “Cyber attack” vs those who left because of other factors – for example the very competitive TV market at the moment which drives a lot of movement around the mainstream providers.

    1. Avatar FibreFred says:

      I would say the loss of 100,000 paying customers is bad whatever the reason. More to come as well I expect but it might balance out with new customers.

      Not good when they are trying to establish a fibre presence in York which is already competitive

  3. Avatar Captain.Cretin says:

    It also doesnt say how many people JOINED, so we dont know how many really left.

    They might have had 201,000 leave, but 100,000 new idiots join.

    1. Avatar Legendary Aced says:

      ‘new idiots’? That doesn’t sound very nice. TT still has some of the best (if not the best) offers and prices in the market. I don’t think that anyone on a budget should be called an idiot for contracting them.

    2. Avatar Paul says:

      you are a idiot if you join talktalk you get what you pay for!!

    3. Avatar Legendary Aced says:

      OK, Paul. I will make note of that. Maybe make a poster and put on the wall of my flat to remember it forever. ‘YOU CONTRACTED TT, YOU ARE AN IDIOT’ and it will be making my day, every day. Good tip!

  4. Avatar Peter says:

    Nor do we know if those leaving were very heavy users of bandwidth which TT might be secretly delighted to be rid off!

    1. Avatar Steve Jones says:

      Why on earth would the 100k who left be disproportionately high bandwidth users?

  5. Avatar Richard says:

    Idiots! Speed and service are spot on.
    I pay £10 a month for fibre plus £17.70 line rental.
    We have three mobile sims for which we part £4 each a month.
    One sim includes 1500 mins, 3 gig data and unlimited SMS. Other 2 sims include 1000 mins, 1.8 gig data and unlimited SMS.

  6. Avatar Michael Bradbrook says:

    Richard I was one of those so called idiots who left because of the Cyber Attack. When you don’t trust a company that can’t keep anybody’s details safe and to this day the website is still not totally secure. Then who’s the idiot, because no doubt Talk Talk will suffer another cyber attack and if it happens again how many will leave that time.

Comments are closed.

Comments RSS Feed

Javascript must be enabled to post (most browsers do this automatically)

Privacy Notice: Please note that news comments are anonymous, which means that we do NOT require you to enter any real personal details to post a message. By clicking to submit a post you agree to storing your comment content, display name, IP, email and / or website details in our database, for as long as the post remains live.

Only the submitted name and comment will be displayed in public, while the rest will be kept private (we will never share this outside of ISPreview, regardless of whether the data is real or fake). This comment system uses submitted IP, email and website address data to spot abuse and spammers. All data is transferred via an encrypted (https secure) session.

NOTE 1: Sometimes your comment might not appear immediately due to site cache (this is cleared every few hours) or it may be caught by automated moderation / anti-spam.

NOTE 2: Comments that break our rules, spam, troll or post via known fake IP/proxy servers may be blocked or removed.
Cheapest Superfast ISPs
  • Hyperoptic £22.00
    Avg. Speed 50Mbps, Unlimited
    Gift: None
  • Onestream £22.49 (*29.99)
    Avg. Speed 45Mbps, Unlimited
    Gift: None
  • xln telecom £22.74 (*47.94)
    Avg. Speed 66Mbps, Unlimited
    Gift: None
  • Plusnet £22.99 (*35.98)
    Avg. Speed 36Mbps, Unlimited
    Gift: £50 Reward Card
  • Vodafone £23.00
    Avg. Speed 35Mbps, Unlimited
    Gift: None
Prices inc. Line Rental | View All
The Top 20 Category Tags
  1. BT (2768)
  2. FTTP (2744)
  3. FTTC (1783)
  4. Building Digital UK (1740)
  5. Politics (1662)
  6. Openreach (1619)
  7. Business (1427)
  8. FTTH (1340)
  9. Statistics (1240)
  10. Mobile Broadband (1221)
  11. Fibre Optic (1061)
  12. 4G (1052)
  13. Wireless Internet (1020)
  14. Ofcom Regulation (1014)
  15. Virgin Media (1004)
  16. EE (696)
  17. Sky Broadband (668)
  18. Vodafone (666)
  19. TalkTalk (661)
  20. 5G (514)
Helpful ISP Guides and Tips

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