TalkTalk revenues up as pay-TV subscriber numbers rise

25 Jul 2013

Alternative UK broadband provider TalkTalk registered its second successive quarter of year-on-year revenue growth in the three months ended 30 June 2013. In the first quarter of the company’s 2013-14 financial year it reported total turnover of GBP421 million (USD646.5 million), up 1.7% against the corresponding period a year earlier. On-net revenues, meanwhile, increased to GBP306 million, representing a 7.4% year-on-year increase from the GBP285 million recorded in the quarter ended 30 June 2012; TalkTalk said that such growth reflected increased subscriber numbers on its own network, as well as higher average revenue per user (ARPU). Corporate revenues, however, were flat at GBP80 million, as continuing strong momentum in data services (up 28% y-o-y) offset the underlying decline in legacy voice revenues. Looking ahead though TalkTalk has said it expects turnover from its corporate services to rise as a result of having recently bagged a number of high profile contracts, including last year’s agreement to supply connectivity to Post Office customers and Iceland Retail Group stores. On the back of the results the telco reiterated its guidance for this financial year, saying it expects turnover to increase by at least 2%.

Total broadband accesses climbed by 8,000 over the three-month period under review, reaching 4.071 million at end-June 2013. The operator also highlighted the fact that it had seen reduced churn through the quarter, with on-net churn falling to 1.4% (down from 1.5% in the previous quarter and 1.6% a year earlier), attributing this in part to customer service improvements. The number of customers taking up the telco’s fibre broadband upgrade package, meanwhile, increased to 95,000 at end-June 2013, from 73,000 three months earlier and just 15,000 at 30 June 2012. Further, TalkTalk’s pay-TV offering appears to be gaining traction, and having added more than 160,000 customers in the quarter, at the end of period a total of 390,000 were signed up for ‘TalkTalk TV’. Finally, mobile voice customers increased to 202,000, up from 175,000 at end-March 2013.

Speaking about the results, TalkTalk’s chief executive Dido Harding, noted: ‘We are continuing to deliver on our commitment to grow the business with strong progress in customer numbers, revenue and new product penetration. Customers are spending more and staying with us longer because of our strong value-for-money deals … We are reiterating our full year financial guidance and remain confident about delivering our medium-term financial targets of revenue and margin growth.’

United Kingdom, TalkTalk (incl. FibreNation)