Telecoms giant TalkTalk shares got a boost on Thursday after the firm unveiled plans to launch its new TV service in a bid to claw market share from its broadband competitors.
The new service, which is free to its Plus customers, may distract attention from the decline during the April-to-June quarter in the group's total customer base, which dipped 19,000 from the previous quarter's level. The company blamed the poor weather which affected the rate at which it was able to connect new customers throughout the three month period.
The legacy broadband-only customer base also continued to decline with 146,000 fewer customers than a year ago, despite the firm's pledge to return to subscriber growth by this point in the year.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Although revenue dropped from £423m to £414m year-on-year (y/y) during the quarter, the group has maintained its outlook, both in the medium term and for the full year. A return to revenue growth is expected in the second half of the year, with average revenue per customer to improve and continued growth in the on-net base.
Latest Videos FromMoneyWeek
More positively, its base of more profitable fully unbundled customers grew by 10% y/y to 3.096m and by 30,000 in the quarter, reflecting the combined effects of continued improvements in churn, and a slower quarter for connections versus the fourth quarter.
The new YouView internet TV set top box offers a 12 month subscription to Lovefilm, as well unlimited calls and data downloads. The firm described it as "the UK's best value triple play".
Dido Harding, Chief Executive of TalkTalk said: "It has been an encouraging start to the year. We continue to improve customer service and this has been reflected in a further reduction in complaints and churn. We returned to customer growth in June, despite longer lead times on connections, and our base of fully unbundled customers grew by 10% year on year in the quarter.
"TalkTalk Plus customers will, from today, be able to pre-register for their free YouView set top box with no additional monthly subscription. It will give our customers more reasons to stay with us for longer and attract new broadband customers. It will also deliver significant value for shareholders. This is TalkTalk at its disruptive best."
The company also appointed the Chairman of Sony Corporation, Sir Howard Stringer, to its board as a non-executive director (NED). James Powell, currently Chief Technology Officer at Thomson Reuters, will also be joining the board as a NED, while existing NED Roger Taylor has decided that the time for TalkTalk is over.
The share price rose 3.18% to 178.50p by 11:45.
NR
