TalkTalk has unveiled its full year results and while profits are down, restructuring costs have hit the spreadsheets and the dividend has been cut, so prospects aren’t looking too bad for the group.
The telco has seemingly found itself an inglorious niche. Competitors might be chasing the big bucks and the convergence dream with shiny content offerings and cringe-worthy adverts with irrelevant celebrities, but TalkTalk is offering something a bit more basic; internet for £18.95 a month, take it or leave it.
Compared to this point in 2017, TalkTalk added 190,000 customers in the year, including 109,000 in the fourth quarter, while churn fell to 1.22%, a record for the team. Virgin Media, Sky and BT might be able to offer thousands of hours of viewing pleasure for the consumer, but some don’t want it or can’t afford the premium which is slapped on content deals. Some just want connectivity for a low-cost, and TalkTalk is seemingly here to serve that niche.
“When we reset TalkTalk a year ago, we said we would focus on delivering sustained customer growth whilst radically simplifying the business,” said CEO Tristia Harrison. “One year into the strategy, we are making good progress on both. Our customer base grew by 192k in FY18, underpinned by our unique propositions and our lowest ever churn.
“We have also made real progress in simplifying the business to focus on core, fixed connectivity. This will continue into FY19 with the sale of our direct B2B business, as we focus on cementing our position as the market leader in our core B2B markets, Partner and Wholesale, which represent over 80% of our B2B business and continues to grow strongly.”
Total revenues are down year-on-year, and it has made the decision to sell its direct B2B business to Daisy for £175 million, though prospects do look good. The last 12 months has shown there is appetite in the market for no-frills connectivity offers, revenue is forecast for growth, ARPU is stabilising, customer numbers are forecast to go up, and a fibre-network partnership with the infrastructure investment arm of M&G Prudential looking very promising as well.
Sometimes you don’t need second-rate breakfast-themed adverts, or pointless and cringeworthy cartoon illustrations of public figures, sometimes you just have to offer customers what they want. No-frills connectivity is not glamourous, nor is it sexy, but it seems to be working for TalkTalk.