TalkTalk chairman Charles Dunstone: Dividend cut will hit me as hard as anyone, but it's key for us to grow

 
Oliver Gill
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(FILES) Charles Dunstone, Co-Founder and
Sir Charles Dunstone, the founder of Carphone Warehouse, is the executive chairman of TalkTalk (Source: Getty)

TalkTalk chairman Sir Charles Dunstone has revealed how he is personally feeling the pinch of the firm's decision to slash its dividend.

The telecoms challenger this morning revealed plans to half its final dividend, reducing full-year shareholder payouts by a third.

And until TalkTalk's net debt can be reduced to less than two times its earnings, dividends will stay at their current level, Dunstone told City A.M..

Dunstone, who founded TalkTalk's former owner Carphone Warehouse, owns just less than a third of FTSE 250 firm. He said:

It was a decision that was taken to have the best interests of shareholders at heart. So yes, I am [being hit financially]. I will feel the pain a bit.

Read more: TalkTalk shares plummet as divi is slashed

The dividend cut came as part of a full-year results announcement where TalkTalk's revenue fell by three per cent to £1.8bn, missing expectations and cutting forecasts.

New chief executive Tristia Harrison and Dunstone said the firm's primary objective is to grow its customer base.

In particular TalkTalk plans to focus on fixed line services. Concern remains among some experts that the UK is being left behind in terms of broadband infrastructure investment .

Prime Minister

And with a General Election around the corner, Dunstone was clear on what his priority would be if he was in charge of the country. He said:

If I was the Prime Minister I’d cancel HS2 and I’d put fibre through the whole country. But I’m not and I don’t suppose that’s going to happen.

Dunstone also dismissed the notion that cheap broadband was strangling investment in UK telecoms infrastructure.

“In general the UK should be proud it has such a vibrant and competitive market. If you compare what you pay in the UK versus what you pay in the US, it’s miles apart," he said.

“One of the greatest lines that you hear people say is: ‘If you regulate us less or you reduce the players in the market place and let us charge more, we’ll invest more.’

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He continued: “The only thing that really drives investment is competition.

“If you don’t have any competition then you don’t have to bother and people have to put up with what you give them."

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