TalkTalk confident of steady improvement: revenue and customer numbers are up
UK operator TalkTalk has today announced some significant revenue and customer increases which it’s mainly put down to the success of its quad play. Talktalk says it expects its overall revenue to grow by 5 per cent for the next two years - up from its previous 4 per cent target.
Talktalk Chief Executive Dido Harding is reported to have told reporters and analysts that on the back of quad play it has managed to sell a million additional services - TV and mobile mostly - over the last year, as well as adding 47,000 phone and broadband customers to its established base.
That meant revenue for the full year to 31 March was up 4.2 per cent to £1.8 billion although profit before tax was just £1 million. But the company is promising to cut £70m from its costs by 2017 and revenues are expected to grow by 5 per cent next year.
That has impressed the ‘City’ which promptly rewarded it with a share price boost of 2.5 per cent in early trading.
The stand-out feature of TalkTalk’s results was not the steady-slog but still single digit progress of its quad play, but what it cites as strong demand for its business services where it’s been deploying what must be loss-leading connectivity offers. The result? It can boast a 40 per cent increase in ‘data product’ sales in the business category.
It’s been spearheading its marketing campaign with a £4 per month broadband offer for small businesses (they would still have to pay line rental), but even so this is an aggressive approach. Plus the company is playing up its free voice app, Talk2Go, which allows customers to use some of their fixed line minutes on their mobiles via WiFi. Also on the business side it says it added 9000 Ethernet lines in the past year taking its total base to over 26,000.
Despite this apparent success, Talktalk is still adamant that the UK market could be improved for all the players if BT were to be properly separated from the infrastructure provider, Openreach. It has joined in calls for Ofcom to recommend BT separation at the end of its current review.
BT has responded in the usual incumbent telco way by threatening to slow its investment in broadband, which kind of proves the point that the playing field is uneven. If all were fair then losing Openreach wouldn’t be such a no-no... would it?