Yahoo Finance TalkTalk laps up Britain's insatiable demand for streaming shows
The British public’s soaring appetite for online streaming services is boosting TalkTalk as its customers fork out for super-fast broadband, according to the company.
The telecoms giant’s (TALK.L) latest trading update shows 75% of its new customers in June chose faster, more reliable and more expensive fibre internet, which can handle more data than traditional copper cables.
The demand is pushing up the amount TalkTalk makes for every customer, with the average consumer now spending £24.72 a month, despite problems with customer service and a data breach scandal in recent years.
TalkTalk’s total sales are up 1.3% to £387m year-on-year in its first quarter up to 30 June, with its full-year outlook unchanged.
The company is still looking for a partner for its bid to move into running broadband infrastructure, challenging BT’s Openreach service through a new arm called FibreNation.
It says its making “good progress” and has “strong momentum” behind an initial rollout of its faster ‘fibre to the premise’ programme in Yorkshire.
The company is also seeking to cut costs, moving to a self-service model for customer service and trying to save up to £30m a year by moving its HQ to Salford.
The company has been battling poor ratings for customer service, as well as seeking to rebuild trust after a cyber-attack that saw it fined for failing to protect customer data.
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The company has ranked poorly in recent years in watchdog Ofcom’s review of customer service in the sector, with TalkTalk customers the least satisfied overall of any major broadband company.
TalkTalk’s users are less likely to recommend it to a friend and more likely to have reason to complain, but less likely to to be satisfied with how their complaints are handled.
In its preliminary results in May, TalkTalk had reported strong full-year earnings growth of 17% as customers switched to faster-fibre products to swatch more streamed shows.
The company has previously said fast-growing demand for video content on Netflix, Amazon, YouTube and other streaming services is a strong driver of recent sales. It predicted 60% of customers would be using super-fast broadband within a year, up from 40% in May.
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Chief executive Tristia Harrison said in May the company was confident of “strong” continued earnings growth next year and beyond.
But TalkTalk was also hit by another scandal over its protection of customer data earlier this year, with the BBC suggesting 4,500 customers’ personal details were available on Google.
The information may have been left online for several years dating back to a major data breach in 2015, which saw TalkTalk fined £100,000 for leaving tens of thousands of people’s data including bank details vulnerable to hacks, scams and use by rogue employees.
The cyber-attack and the company’s breach of data protection law came to light when customers began complaining about scam calls, with scammers quoting their addresses and account numbers.
