TalkTalk results indicate preparation for Harrogate Fibre Nation underway
The latest financial results for TalkTalk are available and they have a broadband customer base of 4,287,000 (retail + wholesale) adding 44,000 in the last quarter. The VDSL2/Gfast (called fibre in TalkTalk results) services are showing continuing growth with what is apparently a record growth of 146,000, the same quarterthe previous year was 89,000. The growth of 146,000 is clearly down to increasing VDSL2/FTTC take-up which with a price below that of BT ADSL2+ and everyone keen to reduce their utility bills should be no surprise.
Ofcom has observed a downturn in the amount of switching in the broadband market place and the latest figures from TalkTalk give some clues as to why this is the case. Churn is down at 1.16% and some 2.3 million retail customers are are a fixed price contract so whereas in the past people would switch every 9 to 12 months due to price rises many are now staying for the full 18 or 24 months. One concern we have with fixed price plans is that many will at the end of the plan to keep similar pricing and avoid random prices will lock in again for another 12 to 24 months - which in the longer term may have implications for retail competition. Another factor is that by and large the public has forgotten the TalkTalk data breach problems which saw lots of people leaving the provider.
One potential bump in the road for the low levels of churn and the TalkTalk sales pitch of 'Fairer plans. Reliable fibre. Brilliant Prices' is those customers with a YouView box connected to their TalkTalk broadband, since they should have been receiving letters about a £4/m price increase unless they opt-out of the ability to add TV boosts. If you opt-out what happens is the TalkTalk add-ons in the YouView box are turned off - whether you can opt back in at a later is unknown. For those that joined TalkTalk on a TV bundle under a fixed price plan this increase will be most unwelcome, so some may seek other alternative providers but for those who prefer the integrated nature of the boosts and Freeview box finding a similar priced alternative bundle may not be that simple and this is why triple play bundles are so popular with operators i.e. people find it harder to migrate away.Our advice is if you are on TalkTalk and have any YouView box connected to your broadband is that you should keep an eye on your TalkTalk bill, since it is not 100% clear if the rise just affects TalkTalk branded YouView boxes or other brands and with the number of older TalkTalk boxes traded on eBay people may get suprised.
The Fibre Nation roll-out is mentioned due to the £5m to £10m costs due to the joint venture but while we have known that Harrogate was the next destination since November 2018 there is a hint that preparation work may be underway as York nears completion.