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TalkTalk: mobile broadband has peaked
08 Oct 2009 | 20.11 Europe/London
The UK’s biggest residential ISP has just posted it’s first trading statement since it acquired its former rival Tiscali. And despite its newest brand losing over sixty thousand customers in period in question, the TalkTalk Group has declared a “stronger than expected quarter for customer growth.” However, its forecast for mobile broadband isn’t so positive.
“We get a sense that the mobile broadband thing has peaked,” TalkTalk Chief Executive Charles Dunstone told The Guardian. “We are seeing some people begin to realise that the bandwidth you get on mobile is so much less than you get on a fixed line. It was a boom and it is stabilising now.”
Ofcom has already highlighted the fact that consumers, on the whole, aren’t satisfied with the speeds they’re getting from mobile broadband via its summer report on the communications market. But Mr. Dunstone has pinpointed another reason why mobile broadband is becoming “increasingly supplementary” – or, almost, a last resort – and that’s the proliferation of Wi-Fi connectivity in places like hotels and trains.
It’s also emerged students are one group that views mobile broadband primarily as a means to supplement their broadband access; coinciding with their return to university, Tesco Mobile says its pay-as-you-go mobile broadband sales went up by a massive seventy-one per cent. And students aren’t the only ones who see mobile broadband in this way. “We’ve always marketed our mobile broadband as a way of taking your broadband out of the home, rather than as a substitute for fixed broadband,” John Petter, managing director of BT’s Consumer division, told The Guardian. “For a stable and reliable broadband service, we believe fixed is best.”
While the popularity of mobile broadband may be reaching its peak, a trading statement released today from the TalkTalk Group shows not even the recession or its acquisition of Tiscali can’t slow its growth. Its TalkTalk and AOL brands alone now have a combined customer base of 2.93 million and, despite Tiscali shedding customers, the group has finished with a net gain of fifteen thousand more over the second quarter. And according to the aforementioned Mr. Dunstone, Tiscali’s performance was “broadly in line with expectations:-”
TalkTalk Group is continuing its growth momentum with TalkTalk’s value proposition and strong customer service clearly appealing to customers. Excluding Tiscali, TalkTalk Group added a higher than expected 77,000 net new broadband customers. This follows the 47,000 net new customers added in the first quarter and, at the same time, churn continues to show a marked reduction year-on-year.
A full copy of the document the TalkTalk Group issued to the stock exchange is available here. It reports that 2.32 million – or seventy-nine per cent – of TalkTalk and AOL customers are on its unbundled network at present, including the seventy-five thousand added in the past quarter. At just over half, the total’s a lot smaller for Tiscali customers – meaning there’s still a lot who could be transferred over onto TalkTalk’s own integrated network. Apparently, it seems it’s good to TalkTalk.
“We get a sense that the mobile broadband thing has peaked,” TalkTalk Chief Executive Charles Dunstone told The Guardian. “We are seeing some people begin to realise that the bandwidth you get on mobile is so much less than you get on a fixed line. It was a boom and it is stabilising now.”
Ofcom has already highlighted the fact that consumers, on the whole, aren’t satisfied with the speeds they’re getting from mobile broadband via its summer report on the communications market. But Mr. Dunstone has pinpointed another reason why mobile broadband is becoming “increasingly supplementary” – or, almost, a last resort – and that’s the proliferation of Wi-Fi connectivity in places like hotels and trains.
It’s also emerged students are one group that views mobile broadband primarily as a means to supplement their broadband access; coinciding with their return to university, Tesco Mobile says its pay-as-you-go mobile broadband sales went up by a massive seventy-one per cent. And students aren’t the only ones who see mobile broadband in this way. “We’ve always marketed our mobile broadband as a way of taking your broadband out of the home, rather than as a substitute for fixed broadband,” John Petter, managing director of BT’s Consumer division, told The Guardian. “For a stable and reliable broadband service, we believe fixed is best.”
While the popularity of mobile broadband may be reaching its peak, a trading statement released today from the TalkTalk Group shows not even the recession or its acquisition of Tiscali can’t slow its growth. Its TalkTalk and AOL brands alone now have a combined customer base of 2.93 million and, despite Tiscali shedding customers, the group has finished with a net gain of fifteen thousand more over the second quarter. And according to the aforementioned Mr. Dunstone, Tiscali’s performance was “broadly in line with expectations:-”
TalkTalk Group is continuing its growth momentum with TalkTalk’s value proposition and strong customer service clearly appealing to customers. Excluding Tiscali, TalkTalk Group added a higher than expected 77,000 net new broadband customers. This follows the 47,000 net new customers added in the first quarter and, at the same time, churn continues to show a marked reduction year-on-year.
On the basis of the definition of customers in the acquisition agreement, we anticipate the adjustment required will be a reduction of 160,000 customers, who are predominantly broadband customers. The consequential true up payment due to us will be made from funds currently held in escrow.
We nevertheless remain confident that TalkTalk Group will end the current financial year with a total broadband base of between 4.1m and 4.2m customers and thus maintain the guidance we announced in June this year.
A full copy of the document the TalkTalk Group issued to the stock exchange is available here. It reports that 2.32 million – or seventy-nine per cent – of TalkTalk and AOL customers are on its unbundled network at present, including the seventy-five thousand added in the past quarter. At just over half, the total’s a lot smaller for Tiscali customers – meaning there’s still a lot who could be transferred over onto TalkTalk’s own integrated network. Apparently, it seems it’s good to TalkTalk.