TalkTalk have announced total revenue for their third quarter of £444 million which saw the total broadband customer base reduce by 25,000 to 4.224 million, although with this drop, it saw broadband revenue increase by 7%. The average revenue per user grew by £1.10 compared with Q3 he previous year to £24.90. The main reason for the fall in broadband numbers was churn in the former Tiscali base as network and systems integration created some 'disruption' for customers.
"We have made a good start implementing the new strategy we announced in November last year, focusing on simplifying our business, improving our operating margins, and delivering value for money products and services for our existing customers.
We successfully completed the last major milestone in our One Company integration programme at the end of January, migrating former Tiscali customers onto our core billing system, ahead of schedule. The integration programme has caused some customer disruption, but provides a strong platform for us to deliver a better experience for all our customers, and enables us to drive further operating efficiencies across the whole business.
Unbundling our customer base is ahead of target and the next phase of our network build- out is already under way. We have now initiated a major reorganisation that will simplify ourbusiness and deliver material operational efficiencies.
Our operating performance in the third quarter was in line with our expectations and we remain on track to deliver our full-year guidance."Dido Harding, (Chief Executive) TalkTalk
The company have announced that the 'One Company' integration is reaching its final stages with the former Tiscali services near completion, and it estimates when complete, the process will save the company around £55m annually. Through other operating efficiencies, a reorganisation that will integrate technology and IT capabilities will see savings of around £25m a year, but this will also lead to 580 job losses.
In unbundling news, the company have achieved the target of 85% of customers being connected to their LLU network. 55 exchanges are currently in the process of being unbundled whilst 700 are in the pipeline to reach the target of 93% of the population.
TalkTalk have also been looking at fibre, with the availability checker launched for their "Fibre Optic Boost" allowing people to increase speeds to up to 40meg through the user of BT Openreach's fibre-to-the-cabinet (FTTC) network. They have also interestingly joined forces with BSkyB in a research and development project into fibre-to-the-home (FTTH) and as part of this will roll out a small FTTH network in North-West London of around 3,600 homes. The aim is to gain knowledge about how this will be used and how much it could cost to deliver, which will allow the company to input constructively towards Openreach's fibre programme.
Quad play is still being eyed after the company launched some mobile options, and they plan to sell this in to the fixed-line customer base. Once YouView has launched, this will give the company the 4 products that will allow it to become a quad-play competitor, selling fixed-line, broadband, mobile, and a TV service all as one solution.
On the business side of things, Opal has been re-branded as 'TalkTalk Business', and it saw revenue in this sector stay broadly flat year-on-year. The majority of the revenue comes from broadband and higher-value Ethernet type services. The voice business has seen a steady decline as has been common amongst other voice operators.