{"id":19037,"date":"2019-07-17T07:52:49","date_gmt":"2019-07-17T06:52:49","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=19037"},"modified":"2019-07-17T09:31:03","modified_gmt":"2019-07-17T08:31:03","slug":"muted-talktalk-update-as-isp-continues-fibrenation-investor-hunt","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2019\/07\/muted-talktalk-update-as-isp-continues-fibrenation-investor-hunt.html","title":{"rendered":"Muted TalkTalk Update as ISP Continues FibreNation Investor Hunt"},"content":{"rendered":"

Budget UK ISP TalkTalk<\/a> has this morning issued a thin trading update to the end of June 2019 (Q1 FY20), which sees them claim to be making “good progress on finding an infrastructure investment partner<\/em>” for their FibreNation (FTTH<\/a> broadband rollout) project but without actually announcing one.. again.<\/p>\n

At the last results release in May 2019 (here<\/a>) we noted that the provider’s growth had slowed and as a result they’d only added +2,000 on-net customers to total 4.289 million. Since the second quarter of the year tends to be one of the slowest, due to seasonal movements of students, then it’s possible they may have seen an overall decline in the latest quarter (i.e. companies that lose customers prefer not to show it).<\/p>\n

Despite this there were some positive highlights today. Strong demand has continued for their “Fibre<\/em>” based broadband services (i.e. mostly FTTC<\/a> with a little FTTH<\/a> from York) with +118,000 net adds in the quarter (Q1 FY19: 67k). Some 70% of new consumer customers took “Fibre<\/em>” services in the quarter (compared with 44% at the same time last year) and this peaked at 75% in June 2019 alone.<\/p>\n

As a result of the above, TalkTalk<\/a> noted that over 50% of their consumer customers now take a Fibre-based product and encouragingly 39% of related net adds in Q1 took the faster 80Mbps FTTC<\/a> product (up from 31% in Q4 FY19), which delivers a higher average revenue per user (ARPU). “[Fibre] customers have significantly higher customer lifetime value – with higher ARPU and materially lower churn and cost to serve<\/em>,” said the ISP.<\/p>\n

Meanwhile total headline revenue (ex-carrier and off-net) was up 1.3% to \u00a3387m (Q1 FY19: \u00a3382m) and headline on-net revenue grew 2.6% to \u00a3317m (Q1 FY19: \u00a3309m).<\/p>\n

Tristia Harrison, CEO of TalkTalk<\/a>, said:<\/strong><\/p>\n

“Q1 is in line with our plan. Revenue and Consumer ARPU rose year on year, underpinned by very strong demand for faster, more reliable Fibre products. Up to 75% of new Consumer customers are now taking Fibre and we\u2019re seeing more customers than ever choose the faster of our Fibre products.<\/p>\n

In addition, our ongoing simplification and cost reductions continue to drive improvement in profitability, and we remain on track to deliver EBITDA in line with expectations for the year.”<\/p><\/blockquote>\n

Sadly it looks like the wait for an investment solution to their FibreNation<\/strong> proposal continues (needed after Infracapital lost interest), which aspires to reach 3 million UK premises with 1Gbps full fibre (FTTH<\/a>) broadband but has so far only targeted c.100,000 (this includes their long-running rollout in York).<\/p>\n

The ISP had previously said that they expected to begin the build of their new full fibre network in Harrogate, Knaresborough and Ripon during this summer but there’s no word on that in today’s announcement. Despite TalkTalk’s struggle for new investment (here<\/a> and here<\/a>) we note that smaller alternative network ISPs seem to have no trouble hoovering up cash front, left, right and centre.
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