TalkTalk results talk of accelerating full fibre after divesting of FibreNation
TalkTalk managed to grab 32% of all the new FTTC connections over the Openreach network in the last quarter and made a total 148,000 net adds to its FTTC/FTTP customer numbers in the quarter ending 31st December 2019.
ADSL2+ though is still not dead as some 19% of new customers still signed up to the old copper services, the question now is how many years will it be before we are saying the majority of new customers joined TalkTalk using a full fibre (FTTP) service? One interesting point is that of the new FTTC customers 42% signed up to the 80/20 tier which is 11 percentage points higher than the same quarter a year ago. The last year has seen the price of the 80/20 product drop and for those close enough to benefit from the extra speed the marginal price difference of just £3 to £5 depending on the current offer cycle is proving tempting for a lot of people.
TalkTalk recently agreed the sale of its FibreNation FTTP network to CityFibre and in return got a long term wholesale agreement to see consumer FTTP over the larger CityFibre network. The Openreach FTTP network is much more widely available and while the odd customer appears the results are still just talking of a national full fibre agreement. The reason that a national agreement needs to be reached rather than just selling the products off the shelf is we suspect that TalkTalk is negotiating volume discounts and other factors. The freedom to pick and choose the FTTP network it wants to use in different areas is an interesting one too, particularly if Liberty Fibre eventually launches and starts to build FTTP at volume.
So while divesting itself of a FTTP network may seem at odds with accelerating full fibre services across the UK, it is likely that by concentrating on where it has been arguably very successful will help. So what has TalkTalk been succesful at, well that is dominating the budget end of the market for some 14 years now.
The takeaway for the industry is that the £20 to £25/m price point remains the critical battleground and if we want to see rapid massed adoption of FTTP services they need to offer something with slighly more speed than existing services but still fall within the £20-25 bracket.