TalkTalk reveals slump in sales of broadband
Telecoms group TalkTalk revealed its broadband sales growth had slowed amid fierce competition as rivals Sky and BT battle it out for customers.
TalkTalk - which positions itself as a value-for-money proposition for broadband, TV, home telephone and mobile services - said its revenues grew 3.5% year-on-year in the three months up until the end of June, but this is a fall from the 6% rise that the business hit in the previous quarter.
The firm said: "The broadband market was softer than we have seen in recent quarters, with higher promotional activity in the sector."
Its shares slumped 8% on the disappointing broadband sales and on fears that TalkTalk is losing out to its larger rivals.
Sky and BT have been spending heavily on promotional deals and football rights to attract broadband customers in recent years, while BT is also swallowing up leading mobile operator EE for £12.5bn.
TalkTalk added that its full-year revenue would be more weighted toward the second half of the year than previously thought, driven by the timing of operating costs and savings it expects to make this year. The firm said it was on track to deliver annual sales growth of 5% and a strong earnings performance.
However, brokers at Jefferies said it now expects City analysts to trim their current full-year TalkTalk earnings consensus of £322m, by around 5%.
Jefferies is pencilling in annual earnings of £303m for TalkTalk, a 24% improvement on the previous year.