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TalkTalk revenues rise in FY15; considering FTTP rollout options

15 May 2015

Alternative UK broadband provider TalkTalk has published its financial results for the fiscal year ended 31 March 2015, with the company reporting ‘strong growth’ driven by the uptake of quad-play services.

In the year under review TalkTalk generated a total turnover of GBP1.795 billion (USD2.48 billion), representing a 3.9% increase against the previous fiscal year, with on-net revenue accounting for the lion’s share of that – GBP1.333 billion, up from GBP1.259 billion in FY13/14. By comparison, off-net revenues fell by 32% in FY14/15 to GBP87 million, while corporate turnover increased by 10.3% to GBP375 million. EBITDA meanwhile increased by 15% year-on-year to GBP245 million, driven by revenue growth, as well as operating cost and subscriber acquisition cost efficiencies. Profit before tax was up by GBP1 million over the year at GBP32 million, with this reflecting the increase in EBITDA and lower amortisation charges, though offset by net exceptional charges.

In operational terms, at the end of March 2015 TalkTalk had 4.283 million broadband accesses on its books, up from 4.186 million a year earlier. On-net connections continued to account for an increasing percentage of those, standing at 4.177 million at the end of the reporting period, up from 4.060 million at end-March 2014, while off-net broadband connections totalled 106,000, down from 136,000. Notably, the uptake of the operator’s fibre add-on service is also gaining traction, with some 479,000 customers having signed up for this option at end-March 2015, more than double the 207,000 reported a year earlier. Fixed voice accesses meanwhile totalled 4.001 million as at end-March 2015 (3.775 million on-net / 226,000 off-net), up from 3.852 million. Mobile voice connections too were up year-on-year, climbing to 464,000, up from 284,000. Pay-TV was arguably the brightest spot though, with TalkTalk reporting that it had 1.414 million customers signed up to such services at end-March 2015, having added almost half a million new subscribers over the year under review.

Meanwhile, one particularly notable development reported as part of the financial filing was with regards to the company’s fibre broadband plans. With TalkTalk noting that it had made good progress on groundworks for a fibre-to-the-premises (FTTP) trial, which is carried out in York as part of a joint venture with rival Sky and CityFibre, it confirmed that some 1,200 homes had been passed in the first dig area, with the first customers expected to be connected this autumn. Saying that early indications of build costs were proving to be in line with its target of under GBP500 per home passed, the telco says it remains ‘confident about the potential to roll out FTTP in scale’. Based on the build costs and an estimated 30%-40% take-up rate, the company has said it believes it will be possible to construct a network covering around ten million premises across the UK. Preliminary discussions on financing such a scale roll out are said to have been positive.

United Kingdom, TalkTalk

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