TalkTalk financial results for first half of 2012
The legacy of the hundreds of thousands of Tiscali customers on low cost but expensive to provide IPStream services is still impacting the financial results at TalkTalk as the results for the first half of September 2012.
In raw numbers, TalkTalk shed 4,000 broadband customers to give a total of 4,043,000 but the shrinkage was in the off-net and shared LLU customer base. The full LLU service which underpins the Plus and Essentials products added 66,000 new customers, taking the number of on-net customers to 3.8 million. The number of shared LLU (where only broadband is unbundled) dropped by 27,000.
TalkTalk h now turned on the marketing machine for its fibre services (via Openreach) and added 22,000 customers in the first half of the year, giving the operator a FTTC base of 30,000. They are expecting growth in this area to link up with the YouView product, particularly in those areas where existing services are slow, such that the 3 Mbps minimum and 5 Mbps preferred speed for YouView are currently not possible.
TalkTalk TV which is now focused around the YouView set top box had an installed userbase of 29,000 and apparently installs at running at 1,000 per day.
While many say that fibre roll-outs are killing LLU, there is no sign of this yet at TalkTalk, their programme to unbundle exchanges continues, and as the unbundling process gives them access to cheaper backhaul it is likely to continue. There are now 2,695 exchanges offering ADSL2+ via TalkTalk or one of their resellers, which gives a foot print of 94% of the UK population. Another 30 exchanges will be unbundled in the second half of the year, and another 300 exchanges the following financial year.
The continuing push of ADSL2+ into the rural areas of the UK means TalkTalk offers ADSL2+ to more parts of the UK than BT Wholesale or Sky, and while the myth exists that all properties in rural areas get poor speeds, the usual formula of the line distance still applies, so for those with a short line ADSL2+ offers significant speed improvements (we define short as <42dB attenuation or 3.5km of copper line), even for those on longer lines the increase in upload speeds will make the use of cloud services and remote working a lot more pleasant.
The results also mean Sky is now the third largest UK broadband provider with 19.2% market share versus 18.9% for TalkTalk.