As deal fever sweeps the sector, the head of Britain’s budget broadband business isn’t fazed.
Dido Harding feels quite relaxed despite the past two weeks’ explosive telecoms deal talk that foreshadows what could be the largest period of consolidation the sector has ever seen.
If anything, the chief executive of Britain’s budget broadband provider – with 4.2m household customers – feels confident her business is best positioned to compete in a market where all her rivals offer bundled broadband, TV, telephone and mobile (quad play).
“We feel in a really good position, we’ve already got a quad play proposition,” Baroness Harding says.
But although she confirms TalkTalk hasn’t hired advisers or bankers to consider deal options (despite “endless calls” from investment bankers over the past week), Harding could soon be drawn into the fray regardless, with Vodafone reportedly eyeing up her business as a second option if it is unable to reach a deal with Virgin Media owner Liberty Global.
“If they decide they simply have to quickly have a fixed- line asset, then I’m not naive enough to think that we’re not one of the companies that they would look at, but they’re going to have to pay a big premium, because we don’t need them,” says Harding.
Harding believes talk of BT buying EE or O2, Vodafone buying Virgin Media, or Sky and BT battling each other over the best sporting content, are all players acting defensively to protect their premium assets – broadband in the case of BT, mobile in the case of Vodafone and content in the case of Sky.
“People who move defensively into new markets tend not to have great customer propositions. We don’t have a premium anything, we’re the value-for-money provider of all four products,” she says, confident as no other provider is yet to challenge her budget segment.
Indeed, as a value broadband provider Harding has led TalkTalk to new heights this year passing 1m TV customers, growing far faster than BT and Sky’s TV businesses. It launched a joint venture with Sky and CityFibre to build a dedicated network in York.
It is this £10m joint venture, codenamed Project Lightning internally as TalkTalk looks to light up the glass fibres it is building, that Harding believes could one day result in a network that connects 10m homes and rival BT’s huge national infrastructure. “We are deadly serious about it,” she says. “In a year’s time we’ll have built out the network, done a significant amount of marketing and have a pretty good sense of whether [the economics work]. The more we look at it the more confident we get. We think you can roll the network out to 10m households across the UK over five to 10 years.”
That sounds like fighting talk to us.