Almost 1 in 4 of the fibre based broadband customers that TalkTalk now has have joined or upgraded in the last quarter. The LLU provider now some 400,000 customers on a fibre based solution, 88,000 new ones in the last quarter. Given the level of promotion from vouchers, free and low cost deals this is no surprise, plus increasing availability will be having an impact.
The Q3 2014 results has 88% of the 4,128,000 customers at TalkTalk on a fully unbundled connection and another 10 percentage points on a shared LLU service. The TalkTalk TV user base grew by over 100,000 customers to 1.3 million. The numbers include 75,000 broadband customers from Tesco who were acquired in January 2015.
For some Virgin Media National and Tesco customers there is a very important point in the financial results, some 108,000 broadband customers have been sold to Daisy Group PLC or more correctly Fleur Telecom who are part of Daisy. This 108,000 represents the off-net customers at TalkTalk, i.e. those in the 4% of the UK that is outside the LLU footprint, which has been static in size for the last two quarters. While the majority of the old Tesco and Virgin Media ADSL customers will be in the LLU footprint, there will be some that are not and thus may find themselves going through another provider change.
Those off-net people moving to Fleur are likely to be in the most rural parts of the UK, where provider choice is at its weakest. We have tried to find out what Fleur say about the move, but the company seemed to only be formed at the end of 2014, and the Daisy Group website oddly talks of not having consumers on its business network. We suspect Fleur is a new provider set up specifically to handle these new customers, the transaction which is part of a plan called Making TalkTalk Simpler should complete by the end of the next quarter.
Returning to fibre there is some good news, the engineering work to deliver FTTP in York has started with the first micro-trenching underway, and the first customers are expected later in 2015. We believe pricing is expected to be the same as the existing fibre products TalkTalk sell, or where more people will benefit from things like improved TV service, faster broadband etc.