Despite British alternative broadband provider TalkTalk reporting that subscriber numbers had fallen for the eighth consecutive quarter – pushing the operator to fourth place, below rival BskyB as at end-September 2012 – it has reiterated its expectation that it will return to revenue growth in its current financial year.
Reporting its financial results for the three-month period ended 30 September 2012, TalkTalk revealed that it generated a total turnover of GBP828 million (USD1.045 billion), down 1.9% year-on-year from GBP844 million in 2Q 2011. Corporate revenues, however, were up in the second quarter of 2012, standing at GBP160 million compared to GBP158 million in the year-ago period. Further, TalkTalk noted that turnover from on-net services continued to improve, driven by an increase in the number of customers accessing services over the telco’s own unbundled equipment. Meanwhile, average revenue per user (ARPU) was GBP25.37 in 2Q12, up from GBP23.99 a year earlier, with TalkTalk citing the increased proportion of customers taking its ‘Plus’ package, fibre broadband add-on or wireless voice service as a factor in the increase.
As at end-September 2012 TalkTalk’s broadband subscriber base fell by 4,000, to 4.043 million, but the operator noted that it in the quarter under review it had seen 66,000 fully unbundled net adds, a figure it said represented its best net adds in two years. Take-up of the operator’s premium Plus tariff surged by 44% y-o-y, it said, with customers taking this option now representing 29% of the total on-net base. TalkTalk’s enhanced mobile voice option, which was bolstered with its decision to offer handsets in August 2012, has also seen solid growth, with 32,000 customers reportedly signing up for a mobile voice connection during 2Q12, bringing the total customer base for such services to 117,000. Meanwhile, having started connecting customers to its new IPTV service, YouView, at the end of September, TalkTalk said that its current installed base (including triallists) stood at 29,000 at the end of the quarter, adding that installations were currently running at a rate of around 1,000 per day.
Commenting on the financial performance, Dido Harding, TalkTalk CEO, said: ‘These results show real trading momentum and are a strong platform from which to build towards our medium term growth targets … The demand we are seeing for additional products from our increasingly profitable and stable customer base, the progress we are making in TalkTalk Business, and the savings we expect from the next phase of simplifying the business, underpin our confidence in delivering our targeted 2% compound annual growth rate (CAGR) in revenues and 25% EBITDA margin in the medium term.’