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ISP TalkTalk Reports UK FTTC Hybrid Fibre Broadband Growth

Friday, January 31st, 2020 (7:53 am) - Score 3,812

UK ISP TalkTalk has today reported their first trading update (Q3 FY2020 financial) since they agreed to sell their full fibre FibreNation network to Cityfibre for £200m (here). The provider, which is home to 4.3 million broadband customers, added 148k new FTTC/P customers in the quarter (down from 174k in Q2 FY20).

The provider noted that the increased take-up of their “fibre” (FTTC and FTTP) packages also accounted for a 32% share of all new Openreach based Fibre-to-the-Cabinet (FTTC) lines in Q3 (Q3 FY19: 23%). On top of that 81% of new customers took a “fibre” product (Q3 FY19: 63%) rather than pure copper ADSL broadband, with 42% of these taking the fastest FTTC (80Mbps) tier (Q3 FY19: 31%).

NOTE: TalkTalk has around 4.3 million broadband customers in total and 1.8 million of that take FTTC.

Unfortunately we don’t get any figures for how many broadband customers left TalkTalk in the quarter, which makes it hard to gauge their overall customer growth. Historically providers tend to only stop reporting this figure when they’re bleeding subscribers rather than growing their overall base. The operator does point to a “modestly declining copper base.”

Separately TalkTalk reiterated that they were still in “talks with BT Openreach on a national Full Fibre agreement,” although they recently launched early trials of related FTTP broadband packages (here). We should point out that the ISP will retain access, as a wholesale customer, to the FibreNation network post-sale and will also be gaining access to Cityfibre’s new FTTP network.

talktalks_uk_full_fibre_future_jan_2020_results

Tristia Harrison, CEO of TalkTalk, said:

“TalkTalk enters 2020 a far simpler business with a structural advantage to accelerate Full Fibre nationwide. The recently agreed sale of our FibreNation business for £200m will strengthen our balance sheet while securing a long-term, competitive wholesale agreement, as well as full optionality to work with all Full Fibre builders.

In the last quarter, we have outperformed the market on Fibre and Ethernet growth, with increasing numbers of customers in both Consumer and B2B taking higher speed products. We have continued to see industry-wide Voice decline, but with the successful completion of our move from London to the North West and the resulting cost reductions our EBITDA outlook remains unchanged.

As we look forward, we will reap the benefits of this simplification, further cost reductions, a strengthened balance sheet and cash generation. Plus, clear optionality to realise our scale and accelerate customer migration to Full Fibre products over the long term.”

On the financial front they reported total headline revenue for Q3 FY20 (excluding carrier & off-net) of £383m (down from £377m in Q2 FY20) and churn of 1.2% (down from 1.26%), while their average revenue per user stands at £24.43 (up from £24.29).

Elsewhere we note that TalkTalk’s Ethernet (high speed business lines) base grew by 1.7k (Q3 FY19: 1.1k), with 36% of orders opting for their higher ARPU 1Gbps lines (Q3 FY19: 29%). In total the operator is known to be home to 37,700 high speed Ethernet connections.

 

Leave a Comment
4 Responses
  1. Avatar Rural FTTP

    > Separately TalkTalk reiterated that they were still in “talks with BT Openreach on a national Full Fibre agreement

    This is odd as they have been listed on Openreach’s FTTP provider page for home and business for the past couple of weeks ( https://www.openreach.com/fibre-broadband/fttp-providers ). I assumed Openreach would only add them to that when they were ready to start commercially selling FTTP, but seems not to be the case based on the information in the release.

  2. Avatar Mark

    “£200m will strengthen our balance sheet” is a key statement.

  3. Avatar Burble

    In five cities there are selected TalkTalk customers on Openreach FTTP.

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