Talking the talk: Harding on Ofcom, hacks, and fibre

 
Billy Bambrough
Follow Billy
Harding claims last years hack attack on the company has made it better at talking to its customers (Source: GREG SIGSTON/CITY AM)

At TalkTalk's Shepherd's Bush offices, cavernous rooms enclosed by exposed walls and trendy staff make this company feel more like an outsized Shoreditch startup than a FTSE 250 constituent.

Fitting surroundings for a firm that is out to ape Google’s growing US broadband service, Google Fibre, as it ramps up its challenge to BT’s faux-fibre offering. The company says it would speed up internet connections in many UK homes.

As part of this telecoms war TalkTalk has teamed up with rivals Sky and Vodafone to try to wrestle the control of national fibre and copper wire infrastructure network Openreach from BT. They have taken the fight to regulator Ofcom.

Last week, the watchdog recommended BT legally separate the division while leaving it under the BT Group umbrella, giving it more independence and investment powers but leaving senior BT managers in charge of the purse strings.

Read more: Economic think tank calls for Openreach to be carved out from BT

Harding has led the charge against Ofcom’s decision, claiming it will make little difference how Openreach works with TalkTalk, Sky, and Vodafone and calling into question the transparency of the regulator.

“It all looks too close, too comfy,” TalkTalk chief executive Dido Harding tells City A.M.


(Source: GREG SIGSTON/CITY AM)

A major complaint against BT’s relationship with Openreach is that it does not disclose how money flows through the group, meaning returns could be used to fund BT’s interests rather than being reinvested in improving the service.

For example, BT announced last year it would pay £960m over three years to air 42 Premier League football matches per season.

“No one knows how much money moves between Openreach and BT. Openreach needs to have completely separate accounts,” says Harding. “Ofcom claims they can see the money moving but if they can then why can’t we.”

“Transparency shines a light on everything. As soon as you have two parties that say ‘we can see it and you should trust us’, that should be a red flag.”

After Ofcom opened the consultation last week TalkTalk launched a campaign called Fix Britain's Internet, encouraging broadband customers to tell Ofcom what they think of and want from their internet service. Through a website people can send a pre-written letter to Ofcom and their local MP asking for better internet.

“I have very little faith that a legally separated Openreach will deliver the things that businesses and customers want, but I hope our campaign gives them the courage to split Openreach out properly,” says Harding.

Read more: BT needs to be open about Openreach aims

Meanwhile, TalkTalk is still recovering from one of the most high profile data breaches in UK history, which, in the chaotic aftermath, was feared could have compromised the financial details of all of its four million customers.

Ultimately, none seemed to have been, despite the attackers making off with 156,000 contact details in October. However, the spectre of the cyber attack continues to haunt Harding and drive change at the business.

“We are much more honest and open with our customers than we have ever been. The hack forced us to become a better company than we were before,” she says.

Shareholders were the hardest hit by the breach. TalkTalk lost 101,000 customers, suffered costs of £60m, and its share price remains around 30 per cent down from its pre-attack value. In May, TalkTalk reported it had managed to grow revenues from £1.79bn to £1.83bn over the year.

But pre-tax profit fell from £32m to £14m as a result of a jump in exceptional costs due to the hack. The upshot is that Harding believes all firms should be made to report all data breaches.

Companies do not currently have to report details of cyber attacks, meaning many customers may be unknowingly at risk.


(Source: GREG SIGSTON/CITY AM)

Harding has attracted criticism for initially warning all 4m of TalkTalk’s customers may had been affected but has defended her decision and stands by it. The move sparked panic among both investors and customers.

Customer service complaints continue to be a bugbear for TalkTalk and Harding wants to focus on improving customer service.

As a first step she offered customers free upgrades in the wake of the cyber attack, an offer which was enthusiastically embraced.

Read more: TalkTalk chief executive Dido Harding has donated her bonus to charity

“It was taken up by ten times more of our customers than I thought it would be, and I’ve been a consumer marketer almost all my life,” says Harding.

She also plans to roll out a fibre network across UK cities, starting in York. Sky and TalkTalk have ploughed £10m into fibre-optic infrastructure in York, and, working alongside network builder CityFibre, they’ve already hooked up 8,000 homes with the ambition to reach 10m homes nationally by 2020.

Despite Ofcom’s latest verdict, the on-going battle surrounding Openreach will probably still be raging even then.

Related articles