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ISP TalkTalk See Growth in Broadband Users to 3.99 Million and FTTH Plan

Wednesday, November 15th, 2017 (8:46 am) - Score 1,644

UK Internet provider TalkTalk has today published their interim results for the 6 months to 30th September 2017 (H1 2018), which reveals that they added +46,000 new on-net broadband subscribers in the period to total 3,993,000 (29% of those use their FTTC/H “fibre broadband” network).

Generally the past three months since their last update have been fairly quiet, although there have been a few big developments. The biggest bit of news appears to be the provider’s plan to scale back their Mobile service (here) and elsewhere they were also hit by another fine for a personal data breach (£100,000 related to the Wipro call centre incident).

The demand for their faster “fibre broadband” service(s) remains strong and the ISP added +160,000 new fibre customers during the six months. Some 40% of new customers choose to take their fibre servces and as a result they now have over 1 million of them.

We also got a small update on their network investment and 1Gbps FTTH rollout in the City of York, although not much has changed since last year and they’ve only just begun deployment work in Dringhouses on their Phase 2 expansion to an extra 40,000 premises (here). The first properties should go live during early 2018 and the extension will complete in two years (around 2020).

Network Investment / FTTH

In May, we announced our strategic decision to focus investment on our fixed line network to deliver a fully upgraded access layer (switches and backhaul) with over 1,000 exchanges equipped with 10Gb backhaul circuits, and support growing FTTC penetration, FTTP and data usage.

In H1, we continued to invest in our Core and Access network layers to cope with increasing capacity demands – we have passed the 3Tb per second mark for our peak bandwidth. We continued to roll out our plans for upgrading the access network layer with over 750 exchanges now equipped with 10Gb backhaul; invested in our core network equipment to manage capacity demands and completed our migration to the new DLM (Dynamic Line Management) and DNS (Domain Name Server) platforms for our residential and business customers. As a result we have maintained a consistently congestion-free network and retained our top ranking for FTTC customers with SamKnows™.

During H2, we plan to deploy additional automation in the core network to manage traffic routing and efficiency; evaluate trunk network fibre opportunities across the UK to further our fibre network footprint and extend our cost advantage further; and begin the planning for a significant investment in in-home technologies for rollout during FY19 to improve monitoring, self-optimisation and performance within customers’ homes.

Take-up of FTTP in York has continued to grow with penetration at over 30% (delivered two years ahead of plan) and the TalkTalk share of the market is significantly ahead of our share of the national broadband market. We began work on extending the network to a further 40,000 premises across the rest of York in October, and expect to complete the build within two years. Beyond this, we continue to actively explore FTTP co-investment opportunities to leverage our clear learnings from York to further cities across the UK.

Curiously there was no mention of the ISP’s current G.fast ultrafast broadband service pilot (here), which marks a bit of a disappointing oversight as we had hoped to get some indication of their launch plans. But on the whole TalkTalk appears to be moving back towards a more stable footing and growth, which comes after two very turbulent years.

Tristia Harrison, CEO of TalkTalk, said:

“When we simplified and reset the business in May we said our priorities were growth, cash and EBITDA, in that order. The first half performance shows we are delivering on that plan. We have now delivered a third consecutive quarter of growth in our broadband base, with both Retail and Wholesale bases growing; returned to on-net revenue growth; and delivered lower churn than a year ago.

Our clear value proposition is resonating strongly against an uncertain economic environment and underpins our plan to simplify and focus all our investment in delivering affordable, reliable fixed connectivity to both homes and businesses.

We expect to step up our planned investment in growth in the second half, as we take advantage of the strong demand we are seeing for our fixed low price plans; fibre take up and affordable propositions in both our residential and B2B markets. Our revised strategy of focusing the business on fewer, clearer priorities is re-establishing TalkTalk as the value provider of choice in the UK fixed connectivity market.”

On the subject of TalkTalk re-establishing itself as the “value provider of choice,” we should probably say that the crown for that seems to have been largely plucked from their grasp by Vodafone’s super cheap Home Broadband offerings, although this may change in the future. On the flip side a race to the bottom on price can make it harder to deliver a good quality of service and support, thus being the cheapest isn’t always a positive.

On the financial front TalkTalk reported total headline revenue of £828m for the six months (down from £869m at the same time last year) and EBITDA of £95m (down from £144m last year). The company’s headline net debt currently stands at £837m (better than £847m last year).

TalkTalk said they have £1,115m (31 March 2017: £1,244m) of committed credit facilities and as at 30th September 2017 the headroom on these facilities was £222m (31 March 2017: £412m), although the ISP said they were “well placed to manage our business risks successfully and have adequate resources to continue in operational existence for the foreseeable future.”

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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 Twitter, , Facebook and Linkedin.
Leave a Comment
1 Response
  1. TONY says:

    Faster fibre is a joke , no min speed i was told after 2mps speeds. My old standard BB was better. I basically paid extra to get much less(im being polite here btw out of respect for your blog lol) Cant see how they will keep any new sign ups once they see past the shiny logo

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