TalkTalk reports headline revenue reduction, citing impact of COVID-19 pandemic

22 Jul 2020

British broadband operator TalkTalk has issued a trading update for the quarter ended 30 June 2020, reporting headline revenue of GBP358 million (USD442 million), down from GBP387 million in the corresponding period a year earlier. According to the operator, the decline was primarily attributable to the impact of the COVID-19 pandemic, with it citing trading restrictions and the cancellation of live sports, as well as ‘ongoing industry declines in voice usage exacerbated by lockdown’. TalkTalk did note, however, that the drop in revenues, and consequently margin, had been offset by ‘incremental and ongoing cost savings of a similar amount’, noting that all key costs areas were ‘significantly’ lower year-on-year.

Meanwhile, keen to highlight some positives, TalkTalk noted that ‘strong momentum’ had been maintained in terms of fibre-based broadband uptake – the operator reported 67,00 fibre-based net additions during the quarter under review, with ‘an improving trajectory in June and July compared to April and May’. Moreover, it claimed that 84% of new residential subscribers had taken a fibre-based broadband plan, up from 70% in the corresponding quarter of 2019, with 59% of those opting for its higher ARPU 80Mbps tariff. Similar trends were reported in the B2B sector, with TalkTalk saying that 58% of new ‘Partner’ customers in its B2B division had opted for a fibre product (up from 50% y-o-y).

Commenting on the company’s quarterly performance, and looking to the period ahead, TalkTalk CEO Tristia Harrison said: ‘As with many businesses, we have seen a short-term COVID-19 impact primarily due to lockdown trading restrictions and cancellation of live sports. Revenue, fibre net adds and ARPU trends have all improved in June and July as lockdown restrictions have eased. Encouragingly customer payment trends are in line with the pre-COVID-19 period and we continue to see an ever-increasing demand for our higher speed Fibre and Ethernet products.’

United Kingdom, TalkTalk