TalkTalk sees revenues rise 22 per cent

Steve Dinneen
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TALKTALK held off defections from its former Tiscali customers to add 42,000 new users this quarter.

The internet and phone provider has flourished since cutting itself free from retailer Carphone Warehouse in March.

It will now seek to maximise revenue and loyalty from its existing user base and improve customer integration.

Its user-base has risen to 4.2m – a rate it hopes to continue – since its transformational acquisition of Tiscali last July. It hopes to gain as many as 180,000 new customers by the end of the year.

Customers gained from its buyout of struggling Tiscali catapulted TalkTalk into second place behind BT in Britain’s residential broadband market. The deal boosted revenue by 22 per cent and core earnings by 27 per cent in the March quarter.

Chairman Charles Dunstone admitted many legacy customers had cancelled subscriptions due to new pricing structures introduced during the integration, but said that was largely over.

TalkTalk said it planned to add 140,000 to 180,000 net group broadband customers this fiscal year, and aimed for revenue growth of six to eight per cent and an Ebitda margin of 14.5 to 15.5 per cent.

Dunstone said he expects to poach customers from other providers with TalkTalk’s simple £6.99 a month price plan for broadband and evening and weekend calls, and its vast network that covers 80 per cent of Britain’s population.

Cable operator Virgin Media, which offers ultra-high broadband speeds on its own network, added 72,300 broadband customers last quarter, taking its base to 4.2m, roughly comparable to TalkTalk’s. Bigger rival BT is due to report results on Thursday.

TalkTalk shares have risen 2.6 per cent since their March debut, outperforming the European telecoms index. Carphone shares have risen 49 per cent.