{"id":6772,"date":"2014-05-15T08:20:49","date_gmt":"2014-05-15T07:20:49","guid":{"rendered":"http:\/\/www.ispreview.co.uk\/?p=6772"},"modified":"2014-05-15T13:58:17","modified_gmt":"2014-05-15T12:58:17","slug":"uk-isp-talktalk-reach-4-2m-broadband-users-looks-toward-fttp-4g-future","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2014\/05\/uk-isp-talktalk-reach-4-2m-broadband-users-looks-toward-fttp-4g-future.html","title":{"rendered":"UPDATE TalkTalk Reach 4.2m UK Broadband Users – Moots FTTP and 4G Future"},"content":{"rendered":"

Budget Internet and phone provider TalkTalk<\/a> has today released its latest results for Q1-2014 (calendar), which saw them add +10k new broadband customers in the quarter to total 4,196,000 (better than the +5k in Q4-2013). But of most interest are their plans for ultrafast FTTP<\/a> broadband and a converged fixed-mobile offer using 4G<\/a> spectrum and femtocells.<\/p>\n

<\/p>\n

The slow growth in TalkTalk<\/a>’s overall broadband base and 1.5% churn rate (down from 1.6% in the previous quarter) somewhat overlooks the fact that their Superfast Fibre Broadband<\/strong> (FTTC<\/a>) service continues to grow at a better pace, adding (net) +30,000 new customers in the quarter to total 207,000<\/strong>.<\/p>\n

But sadly this fibre growth is down from the +35k added in the previous quarter and sharply lower than the +47k in Q3 2013 before that, although the ISP notes how its data gobbling on-demand TV (YouView<\/a> \/ IPTV) product seems to attract more FTTC<\/a> subscribers and indeed 50% of their fibre customers have taken the TV solution.<\/p>\n

Speaking of TV, TalkTalk<\/a> had another strong quarter as it added +185,000 new subscribers to reach a total of 917,000 (includes many existing broadband users), which represents significantly better growth than BT<\/a>’s TV platform (i.e. added +46k in the quarter and has a similar total) and is also another improvement on the +175k added in Q4-2013 and +167k during Q3-2013. Clearly the budget proposition is attractive.<\/p>\n

In additional, TalkTalk unbundled (LLU) another 13 telephone exchanges<\/strong> from BT<\/a>’s network (total 3,027) to take their UK network coverage a smidgen beyond the 95% mark. Meanwhile the number of subscribers that still use BT<\/a>’s platform instead of the LLU network fell to total 136,000 (down sharply from 151,000 in Q4 2013).<\/p>\n

Dido Harding, CEO of TalkTalk, said:<\/strong><\/p>\n

“I am delighted to report our first full year of revenue growth since demerger demonstrating that our strategy for growth is delivering. We have built a TV business with over one million customers in just 18 months – a quarter of our total customer base. We continue to grow faster than all the other UK TV operators put together and are confident that in time, all our customers will take TV. Our focus on data products for businesses is also delivering very strong growth and as a result, TalkTalk Business is one of the fastest growing B2B telecom operators in the UK.<\/em><\/p>\n

Following investment in the first half, we delivered a sharp rebound in profitability in the second half combined with accelerating revenue growth. We are on track to deliver our financial targets by FY17, and are increasingly excited about the longer term growth opportunities beyond. As a result we are committing to another year of growing the dividend by no less than 15% in FY15<\/em>.”<\/p><\/blockquote>\n

In terms of the future, TalkTalk also remarked upon its initial investment of \u00a35m<\/strong> in the joint venture with Sky Broadband<\/a> and CityFibre<\/a>, which aims to roll-out (starting with 20,000 premises<\/strong> in phase one during 2015) a “city-wide<\/em>” ultrafast 1Gbps<\/strong> capable Fibre-to-the-Premises<\/strong> (FTTP<\/a>) network in the English City of York<\/strong> (here<\/a>).<\/p>\n

“We believe the economics of our approach to FTTP<\/a> could prove highly attractive, with a combination of scale and low cost build technology delivering a significantly lower cost per home passed than for the current FTTC<\/a> infrastructure<\/em>,” said TalkTalk. We’ll be interested to see if they can do FTTP cheaper than FTTC, although it’s worth remembering that CityFibre<\/a> has already built the underlying core network.<\/p>\n

Today’s results also included a very brief mention of their plans to build a converged fixed-mobile offer using 4G<\/a> spectrum and femtocells<\/strong>, “such a national roll-out would allow us to offer our customers seamless, unlimited and low cost connectivity in their homes and businesses, and significant opportunities to drive growth over the longer term<\/em>.” BT has a similar ambition, although much like TalkTalk the timescale and details for all this remain unclear.<\/p>\n

Finally, on the financial front, TalkTalk saw its total quarterly revenue<\/strong> grow from \u00a3436m in Q4 2013 to \u00a3448m<\/strong> now, although it’s worth noting that their net debt in the year increased by \u00a3104m to \u00a3497m (compared with \u00a3393m in the previous financial year). A high annual capital expenditure (\u00a3107m) has also contributed to an operating profit of just \u00a351m, which somewhat limits their future spending power.<\/p>\n

UPDATE 12:43pm<\/strong><\/p>\n

Perhaps somebody made a typo over at the FT<\/a> today but if not then it appears as if Dido Harding eventually envisages their new independent fibre optic (FTTP\/H) broadband network as reaching more than 10 MILLION<\/strong> homes across the country (note: BT’s hybrid fibre FTTC network is currently orderable by 19 million premises\u00a0– covering 66% of the UK), which is quite a step up from the 20,000 so far confirmed for York.<\/p>\n

It’s good to have long-term goals and we salute their aspiration, although at present TalkTalk’s balance sheet is rather frail and the ISP would need to invest astronomically more than \u00a35m in order to get even close to such a goal. On the other hand there is scope for a widening of their deal with Sky Broadband<\/a> and CityFibre<\/a>. Never the less Harding’s ambition might be premature and it would perhaps be best to wait and see what they learn from the development in York before setting expectations.. well too late for that now.<\/p>\n","protected":false},"excerpt":{"rendered":"

Budget Internet and phone provider TalkTalk has today released its latest results for Q1-2014 (calendar), which saw them add +10k new broadband customers in the quarter to total 4,196,000 (better than the +5k in Q4-2013). But of most interest are their plans for ultrafast FTTP broadband and a converged fixed-mobile offer using 4G spectrum and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[61,472,55,56,42,34,74,102],"class_list":["post-6772","post","type-post","status-publish","format-standard","hentry","category-uk_isp_news","tag-4g","tag-business","tag-fttc","tag-fttp","tag-iptv","tag-statistics","tag-talktalk","tag-youview"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nUPDATE TalkTalk Reach 4.2m UK Broadband Users - Moots FTTP and 4G Future - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Budget Internet and phone provider TalkTalk has today released its latest results for Q1-2014 (calendar), which saw them add +10k new broadband customers\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2014\/05\/uk-isp-talktalk-reach-4-2m-broadband-users-looks-toward-fttp-4g-future.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UPDATE TalkTalk Reach 4.2m UK Broadband Users - 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