TalkTalk halts customer exodus after cyber attack but broadband base 9,000 lower
Telecoms group TalkTalk has said its broadband customer base remains 9,000 lower despite halting the exodus from the firm following last year's cyber attack.
The company said revenues held largely firm, edging 0.4% lower in its first quarter, as it continued to cut costs and grew its corporate business to help offset the impact of the hack last October, which resulted in the personal data of nearly 160,000 people being accessed.
TalkTalk said it had stemmed the flow of customers quitting the group, with so-called churn remaining close to its all-time low at 1.36% in the three months to the end of June.
It added new broadband customers, but at half the pace of the previous three months, at 36,000 on a net basis - those joining less those leaving - while mobile net adds also nearly halved to 48,000.
TalkTalk said its broadband base was still 9,000 lower during the quarter, with on-net revenues falling 2%.
The group lost 101,000 subscribers in its third quarter last year and was forced to temporarily shut down its online sales channels in the wake of the cyber attack.
Chief executive Dido Harding insisted the group was "pleased with how the year has begun".
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"Revenue growth was level year on year despite a smaller customer base and churn was down year on year," she said.
TalkTalk has already warned that revenues will remain under pressure over the first half of its financial year, but expects to return to growth in the final six months and is sticking by forecasts for underlying annual earnings to grow to between £320 million and £360 million.
TalkTalk saw pre-tax profits more than halve to £14 million in the 12 months to the end of March, as it took a £ 42 million hit from the cyber attack.
The group offered customers a free upgrade to help soothe concerns after the data breach and created a new bundle of online and telephone security features to boost customer protection.
The TalkTalk attack was branded a ''car crash'' earlier this year by i nformation commissioner Christopher Graham, who said it should send a warning shot to the industry.
TalkTalk's latest trading update showed TV customers continued to drop, down 23,000 at the end of its first quarter.
It is hoping to see TV subscriber numbers recover after recently announcing a deal to offer BT Sport channels from June, while customers can also now sign up and pay for Netflix on their TalkTalk bill.
It said its trial to offer direct fibre optic broadband access in York was making "good progress", with nearly 11,000 homes connected.
The group added that nearly half of connections under the trial are new customers.
Jerry Dellis, analyst at Jefferies, said despite TalkTalk's assurances over a second-half bounce-back in revenues, the group's full-year forecasts may prove ambitious.
He added: "A slowdown in UK economic growth following the Brexit vote would make TalkTalk's outlook appear even more fragile."