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ISP TalkTalk See Broadband Base Shrink to 4.22m as Fibre Grows

Thursday, June 11th, 2020 (9:08 am) - Score 10,440
talktalk uk broadband isp logo 2020

UK ISP TalkTalk has today reported their latest trading update to 31st March 2020 (FY20 financial), which saw their on-net fixed broadband base decline from 4.289 million last year to 4.22m now. On the bright side their fibre (FTTC/P) base increased by 605,000 (net adds) in the year to account for 2.37m of the total.

At this point it goes without saying that the Coronavirus (COVID-19) crisis has had a huge impact across almost the entire industry (e.g. closing call centres, disrupting new line installs, higher data usage etc.), although most of this was felt from late March onwards and as such shouldn’t yet have had a huge influence over TalkTalk’s latest results.

Equally the fact that most of their “fibre” base is still dominated by Openreach’s slower hybrid fibre (FTTC) network, which can be self-installed (no engineer required inside your home), may have provided some protection. Nevertheless TalkTalk states that “engineers have been unable to visit customer premises and this, combined with consumers being reticent to switch for fear of losing connectivity, has led to lower gross additions.”

In fairness we should point out that Vodafone’s recent results for the same period showed a significant surge in take-up (here), which suggests that fear of switching may be overrated as an excuse. TalkTalk’s growth in fibre also remains positive, which confirms that the overall decline in their fixed broadband base has almost certainly come from older ADSL lines.

Otherwise the main development for TalkTalk during the first quarter of 2020 was the £206m sale of their FibreNation network to Cityfibre (here), which reflected their own roll-out of gigabit-capable Fibre-to-the-Premises (FTTP) broadband technology in York and several other towns. Under this deal TalkTalk retains access to the network, albeit under Cityfibre’s ownership.

The bad news is that TalkTalk still aren’t able to give a launch date for their Openreach based range of FTTP broadband packages, which has been in trial since late 2019.

Update on TalkTalk’s Openreach FTTP Plans

Separately, we remain in talks with Openreach to gain access to competitive pricing to encourage faster adoption of FTTP throughout the UK. We will also seek to enter into wholesale agreements for FTTP with other altnets where we are able to do so.

We spent much of the first half of the year building the systems and capability to provide FTTP services and throughout the second half of the year have launched Openreach FTTP to customers on trial pricing. We continue to be well placed to succeed in this space. With multiple routes to market through TalkTalk Consumer, Business and Wholesale, as well as a significant existing customer base, we are one of the few scale operators able to offer significant volume commitments to network builders and drive commercial advantage.

Despite this the ISP said that their “long-term ambition is to transition all customers to new FTTP networks as quickly as possible” (i.e. via Cityfibre, Openreach and possibly other suppliers). Speaking of which, 85% of TalkTalk’s new consumer customers in March signed up to one of their “higher speed” products (compared to 72% at the same time last year) and, of these new fibre customers, some 49% took their 80Mbps FTTC product throughout FY20 (FY19: 30%).

General Changes

The ISP has also given an update on their progress in other areas too, such as Ethernet (leased lines etc.). TalkTalk grew their overall Ethernet base to 42,600 (FY19: 37.3k), with 5.3k net adds (FY19: 5.3k), representing a c.17% share of all new Openreach Ethernet lines (some 36% of orders were for their 1Gb service [FY19: 23%], which comes with significantly higher ARPU and lower churn).

At the time of writing TalkTalk also predicts that COVID-19 will have a £15m impact on their business.

Tristia Harrison, CEO of TalkTalk, said:

“Our priority throughout the COVID-19 pandemic has been to keep the nation connected, while keeping employees safe. Access to reliable, affordable connectivity has never been so important – and low prices matter now more than ever before. As the only scale, value provider, TalkTalk continues to be well positioned to meet this demand. Our strong and resilient network has kept families, friends and communities connected nationwide; and provided vital services for the NHS, care homes and supermarket distribution centres.

Our FY20 performance has been robust. We have grown our Fibre Broadband base by 34% and grown our Headline EBITDA by 9.7%. Whilst industry wide Voice usage declines and the continued re-contracting of the legacy copper base has led to some revenue decline, this has been more than made up by ongoing cost reduction and simplification. The completion of our HQ move from London to Salford and the sale of our Fibre Assets Business to CityFibre for £206m has made us a simpler and more resilient business.

Looking ahead to FY21, we remain in a robust operational and financial position, with levers in our control to manage costs further, whilst having not required any furlough or government assistance. While the uncertainties of COVID-19 mean we will not be providing formal guidance, based on current trends we would expect to deliver stable Headline EBITDA year on year, after assuming a c.£15m COVID-19 impact. We also expect strong cash conversion and will therefore be maintaining the dividend at 2.5p.”

On the financial front they reported total headline revenue for the year of £1,518m under the IFRS 16 reporting standard, which is down from £1,544m last year under the pre-IFRS 16 system. Similarly the statutory operating profit came in at £197m, which is up from just £47m last year.

However on-net churn remains at 1.2% and net debt is now £954m, which is up from £781m last year.

 

Leave a Comment
24 Responses
  1. Avatar Burble says:

    Well Tristia can’t say I didn’t warn her 😉

  2. Avatar CJ says:

    Maybe TalkTalk should ask their customers what they think a guarantee of no price rises during the minimum contract term means, and reflect on what they say.

    I certainly don’t think introducing new charges for services that were previously included at no extra cost (eg. Anonymous Caller Reject) just a few months into the contract are within the spirit of the guarantee. At least have the decency to defer any new charges until the end of the minimum contract term/price guarantee.

    I’ve now moved elsewhere and I’ll never go back. My advice to Tristia? Find whoever signed off the idea of new charges for in-contract customers as a ruse to get around the wording of a “no price rise” guarantee, and sack them before they do even more damage to your brand.

    1. Avatar H Rahman says:

      Terrible provider

    2. Avatar Ian Tommins says:

      I can’t understand why providers insist on in-contract price rises. Is the extra pound or two per month really worth the bad feeling it generates with customers, or the customers they lose when they have to offer an option to cancel the contract.

      Contracts are usually only a year or two. It should be easy to predict the cost of providing a broadband connection over that period.

  3. Avatar Theresa says:

    And they still have the cheek to charge me £12 late payment fee!

    1. Avatar Ken says:

      Then perhaps you shouldn’t have paid late?

    2. Avatar Mike says:

      @Ken

      Bucket shop ISP’s tend to attract those ‘sorts’.

  4. Avatar H Rahman says:

    Talk Talk is a terrible internet provider. I have got problem with my internet since 29th of April til up to date.After Nemours calls&e mail & few visit from engineer & ofcourse a new router,stil I have got very slow or no connection at all. No apologies or compensation form Talk Talk though I been a Talk Talk customer for many years. Now i have decided to leave. I have had enough. Please,please stay away from Talk Talk.

    1. Avatar Alan Clark says:

      Sadly I think you will find it is not TalkTalk that is at fault it is Qpenreach who supplied the line to your house, they mucked around with my friend trying to get him to sign up to BT

    2. Avatar Toni Greenwood says:

      Snap no internet at all, new router same problem, then they tell me its a problem with the exchange, now still no internet, they said we will send an engineer free of charge wow, what a gift, but….you will have to wait another week, !!guess what, talktalk are no longer my provider, (the wprst bar none) customer service I have ever had the misfortune to deal with!!!

  5. Avatar Matt says:

    I guess as CityFibre rolls out full fibre networks across the country that they’ll see an increase in sign ups.

    Myself, I’m not a TalkTalk fan, but then I’m not a fan of most ISP’s, however I have in the past had TalkTalk’s ADSL offering and found it to be a superior service over others (Sky, BT and O2/Be) at the time.

    As a budget supplier though, I think they serve there purpose.

  6. Avatar Paul says:

    On openreach website it lists TalkTalk as a fttp provider yet they only give me fttc

    1. Avatar Burble says:

      Openreach are a bit previous with this, although TalkTalk are running a trial of FTTP over Openreach fibre, it’s not available for sale to most people.

    2. Avatar Love Broadband says:

      I made enquiries about taking up TalTalk’s UFO Service. (Full Fibre / FTTP)

      OpenReach website CONFIRMS my area is fully enabled.
      OpenReach website CONFIRMS TalkTalk are a trusted FTTP supplie.

      BT website says I can order FTTP today.

      -TalkTalk staff have absolutely NO CLUE about what they are talking about.

      -TalkTalk staff have LESS idea about broadband than 1 Google search can tell you.

      OK, we are mostly techies on this site but I have never witnessed such utter garbage, obscene trollop lies and monumentally stupid uneducated sales staff, these people deserve Olympic GOLD for idiocy. I am surprised their staff can dress themselves and find the office to turn up to work, it really is that bad.

      TalkTalk customer services are a total embarrassment and bring utter shame to the brand.

  7. Avatar Kavita Adams says:

    Worst customer service I’ve experienced.
    My recent dealings with TalkTalk saw 2 agents offer renewal deals (on separate occasions) which were not honoured and then increased in price. I was cut off several times after long calls (which wasted a lot of time and caused unnecessary frustration/repetition) and eventually got told that the deals offered were both ‘genuine mistakes’. Due to this treatment, I have now changed ISP.

  8. Avatar Anonymous says:

    TalkTalk for me have actually been a brilliant ISP. I’ve been with them for around 7-8 years now and started with ADSL. Moved to FTTC 40/10 a couple of years back and only a week ago recontracted to FTTC 80/20 as my contract was nearing its end.

    I’m paying £21.95 for a 80/20 service where previously I was paying 19.95 for a 40/10 service. Bet no other ISP can beat that? The Live Chat advisor was brilliant, in that he offered me a free speed boost (80/20 service is known as Faster Fibre with Speed Boost) for the duration of my new contract. Getting 80/20 as was advised .

    Touch wood, I’ve never had a problem with them, and CS have actually been decent when I do need a little help, although I mostly use the Community when I do. I’d actually recommend TalkTalk, and I’m usually a tough cookie to please.

  9. Avatar Paula says:

    Talktalk are a disgrace. They make it very difficult for you to leave them, regulator should be fining them big time, they’re crooks, read reviews and own twitter feed shocking

  10. Avatar Ann says:

    Ive been with talktalk ever since they started and have never had any problems

  11. Avatar Sam says:

    Its because TT keeps pushing the 40/10 sync service. These days all FTTC lines should be run as fast as they can, just like when adsl max and adsl2+ came about. Everyone i know moans that TT is slow, 40/10 sync is the reason. They boast im paying less than sky, yet they are getting half the speed! Sky is far better value per pound.

  12. Avatar Joe says:

    Users aren’t reticent to switch….. Talk talk won’t release my land line number even though my contract is up. I can’t leave even though I’ve tried!

  13. Avatar patrick gibson says:

    Personally I’ve seen my broadband speeds half since I connected with talktalk. Download speeds are as low as 18 most days when they use to be as high as 72 . And the customer service is absolute disgrace. Was told if speeds dropped below 35 for 3 month of more I could cancel 33 is the best I’ve had this year .

  14. Avatar Peggy Carter says:

    I would say quite a lot of the time its either the customer or Openreach at fault and not the ISP. People not understanding how WiFi and throughput works is a massive issue. Aside from that every ISP uses pretty much the same equipment and employ outsourced tech support. Just educate yourself better and fix your own issues more. And stop thinking ANYONE has superior support etc its simply not true. They all fix what they can based on what you tell them. Your GAS and Electricity suppliers are the only utility crooks.

  15. Avatar THERESA WALSH says:

    Why are you sending out letters to old people, saying you will disconnect them when it has not been possible to renew contracts by phone, for last 3 months due to Covid 19 and when the option on the phone was suspended?
    My mother receive a letter yesterday, dated 16th May.

  16. Avatar Raymond Scott says:

    Talk Talk left me without any Internet ( and TV for 3 Days) from 12th March to 16th June, although I was having BB speeds of only half the promised faster fibre rate of 38mbps from the start of my contract on 29th Feb 2019 until March 2020, the real problem began when they were updating the Exchange, at this point I lost everything and 4 days later it was not resolved, despite numerous Phone Calls nothing could be sorted so a decision was taken to send out an Engineer 2 weeks later on 31/03/2020, a couple of days prior to the planned visit he Texted me to confirm I would be in and said he would be wearing Rubber Gloves and a Face Mask, I said that was fine and would be glad to get this BB problem sorted. He didn’t turn up, didn’t Ring, Text or Email even though I waited all day. It was impossible to contact Talk Talk through the Tech Number or on line during April and May and I only got through to them on 16th June, a CSA called Zoey listened to what I said, checked the File and Flashed the Router with the latest Firmware and Bingo the System is up and running and has not had a glitch since. This problem that meant I as a Shielded person on Lockdown had no Internet Connection throughout was sorted in less than 10 mins. Of course the problem now is appropriate Compensation where Tom Hairsline CEO Case Manager of Talktalk is arguing over the amount.
    Initially the problem was clearly an unstable line at the exchange which caused the very low BB Speed, when that was fixed 12-16 March the Router then required immediate updating with the Latest Firmware, what a shame Talktalk cannot see their own shortcomings. I shall never use Talktalk again once this current contract expires at the end of August as they provide the worst Customer Service I have ever known.

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