TalkTalk cyber attack costs firm 95,000 customers
This is the first quarter where the impact of the previous cyber attack on TalkTalk systems is visible and the headline is not good news, as the provider has shrunk in size with 101,000 less connections than it had at the start of the quarter. The level of churn was higher than expected at 2.1% but only 0.6% of that is attributed to the attack, the churn was of course partially offset by new gains.
The quarters results are not all negative as the provider had 54,000 new fibre based connections in the quarter and the all important ARPU improved by 6.3%. Other reasons for the higher churn may be that prices for broadband have crept up in the quarter and while things like voice line rental are cheaper than BT Consumer a difference of 29p per month may not be enough to entice people.
"It is encouraging to see the business returning to normal after a challenging quarter that was dominated by the cyber attack. Our customers have responded well, with almost half a million customers choosing to take up our unconditional offer of a free upgrade. Both churn and new connections recovered during December and January and independent external research has revealed that customers believe that we acted in their best interest. In fact trust in the TalkTalk brand has improved since just after the attack and consideration is higher now than it was before the incident."Dido Harding, CEO TalkTalk Group
The fibre additions figure is interesting, as Openreach declared 494,000 new fibre connections in the quarter, 250,000 which went to BT Consumer. This means that there is 190,000 fibre customers to be shared between Sky and the other providers.
The ongoing future of TalkTalk as the poster child for value for money in the broadband world hinge on the current regulatory reviews underway, if things do not go as TalkTalk want the same regulatory environment that allowed them to explode onto the scene in 2006 may be the slow death of the provider.