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TalkTalk loses 43,000 customers, chunk o' revenue in Q3

Better HomeSafe than sorry, telco insists

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TalkTalk lost 43,000 broadband customers during the company's third quarter and reported that revenue in that area of the business had fallen year-on-year.

The telco told the City this morning that it was continuing to unbundle exchanges during the quarter and attributed the decline in subscribers to the fact that it was cutting customers loose from BT-based broadband lines.

TalkTalk pulled in broadband sales of £312m during the three-month period ended 31 December 2011, compared with £316m in the same quarter a year earlier.

Total Q3 revenue also fell from £444m a year ago to £422m.

Average revenue per user (ARPU), which is an important metric for telcos, did grow, however. TalkTalk reported ARPU of £25.3 – up from £24.9 in the company's 2010 third quarter.

"As a result of the success of our unbundling programme, ARPU growth and earlier than expected delivery of cost savings, we are raising full year EBITDA and EPS guidance," said TalkTalk boss Dido Harding.

"We have continued to improve our customers' experience with further falls in customer service call volumes and an increase in the rate of online self-service. As a result, churn has stabilised and we remain confident of a return to positive total net adds in the first half of 2012.

"Our operational achievements and strong financial performance give us confidence as we look ahead to delivering an exciting strategic agenda through 2012, including the launch of our TV proposition."

Of the company's 4.08 million customers, only 270,000 of them have so far opted to use TalkTalk's HomeSafe technology, which is a network-level anti-malware blocker for the consumer broadband market.

The system, implemented by the firm in May last year, was provided by Chinese vendor Huawei and works by harvesting every URL visited by every TalkTalk customer. It then follows them to each web page and scans for threats, creating a master blacklist and whitelist of dangerous and safe URLs respectively.

From the end of this month, any new TalkTalk customer will be prompted by the telco to confirm that they are happy to bypass the technology – in effect agreeing that any child using that service will have access to all that the big bad internet offers, such as porn or gambling sites.

Broadband minister Ed Vaizey welcomed the move.

"Ensuring new customers make an active choice about parental controls is a good start in improving the protection for children online," he said.

"It will mean new customers will have to decide whether they want parental controls on their internet access. I look forward to continuing to work with industry to ensure children can safely enjoy the internet." ®

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