TalkTalk slips under the 4 million broadband customer mark
TalkTalk has shrunk again in terms of the number of broadband customers a trend that started in July 2015 ahead of the hack that many are citing as the reason for the drop in numbers, no doubt it has not helped with now just 3.996 million broadband customers. The latest financial figures for the group indicate that in addition to the hack an item we've reported on before i.e. a change in credit terms and letting 72,000 customers go for not paying their bills has also had an impact. The positive side is that the ARPU has increased.
Things are more positive on the VDSL2 and FTTH side of things the reported customer base on GEA-FTTC is 704,000 or 19% of the customer base compared to 13% a year ago. Also the FTTH pilot in York gets a large mention.
"We are making significant progress meeting the key operating metrics (cost per home passed, customer experience and penetration) in Ultra Fibre Optic (UFO), our fibre to the premise (FTTP) trial in York. We completed the build of the first 8,000 homes at a cost of under £500 per home and are now testing penetration. Customer trials ended at the end of March, when we launched the proposition commercially. Over 90% of the trial participants have chosen to retain the service and pay £21.70 per month which is particularly notable, as the vast majority were not existing TalkTalk customers. After two months TalkTalk UFO penetration stands at 7% of homes passed and continues to accelerate. Feedback from the first customers has been extremely positive and we are polling customers in other York neigbourhoods (their spelling mistake) to establish interest for the next phase of building.
Based on these experiences, we remain confident about the potential to roll out FTTP at scale. At a build cost of under £500 per premise passed and 30%-40% take-up, we believe it will be possible to build a c10million household network across the UK. We see Ultra Fibre Optic as an opportunity to build a mass market, value for money proposition that delivers value for consumers and shareholders through keen pricing and rapid scaling. We expect to review progress and decide on the next phase of development later in the year.TalkTalk on York FTTH roll-out
7% take-up suggests 560 customers which is very similar to the figure CityFibre have suggested but does raise an interesting question, we have been seeing TalkTalk customers with speedtests that are clearly from the ultrafast FTTH solution for somemonths but for Sky customers that area of York looks to be still on FTTC type speeds, it is possible that Sky is running its pilot differently and matching the product speeds it sells across the rest of the UK.
The nation awaits the outcome and would love to see Sky and TalkTalk working with CityFibre to push the roll-out to 10 million premises but it has taken a year to get to the stage we are at now where work is pushing the coverage to 20,000 premises and thus any serious attempt to deliver 10 million premises is going to need massive expansion of resources and with both Virgin Media and BT still building faster networks the cost of contract labour is not about to drop significantly in fact if demand is high and being competed the cost may actually go up.