Data Centre


TalkTalk plans to bail on mobile in major shake-up for beleaguered biz

Three reported to be 'interested' in a deal

By Kat Hall


Beleaguered UK comms provider TalkTalk is set to go against the received "wisdom" of having multiple services to flog as it plans to pull out of the mobile market entirely.

The move is a fairly significant change of tack given that not so long ago it had targeted four million mobile customers. TalkTalk now has just 913,000 SIM customers. Chief exec Tristia Harrison said the company wants to refocus on its core strength as a "fixed-line business" and reassess its mobile strategy.

No doubt she hopes concentrating on broadband will help boost the company's lacklustre results, with revenues continuing to decline by 3 per cent to £1.7bn for the full-year 2016/17.

The plans are part of a shake-up following founder Charles Dunstone's return as chair after chief exec Dido Harding resigned earlier this year.

Her tenure spanned a number of major gaffes for the company, including a hack that affected 157,000 customers' personal details in 2015 costing £42m. And the exposure of 21,000 customer records to fraudsters in an Indian call centre, which recently resulted in a £100,000 fine from the Information Commissioner's Office.

A suitor for its phone business has yet to be identified, although the mobile virtual network operator (MVNO) said it is in talks with its current provider O2 and is "in advanced discussions with a number of potential partners".

Matthew Howett, independent analyst, said acquisition-hungry mobe operator Three has started to make eyes at the provider.

"The feeling is TalkTalk needs to do something given its recent performance. The home broadband element and TV is probably what it is most synonymous with. So the exit itself is not too surprising.

"However, the rumour Three may be keen to acquire it is very interesting as they are pure mobile and that would fit with their growth strategy."

Howett noted that Three chief David Dyson has not ruled out a TalkTalk deal. "We know that Three is on an acquisition spree [with its recent purchase of UK Broadband for £250m] and it has bigger ambitions than just remaining the size it is."

Howett said the much-hyped "quad play" model espoused by marketers of having a package of services on offer including broadband, internet access, television and telephone, has yet to be proved as a sales strategy in the UK. EE/BT is the entity closest to achieving a full package of services.

He said TalkTalk's idea of refining its offering could make sense in an increasingly competitive market.

Kester Mann, analyst at CCS Insight, agreed that TalkTalk going back to its roots as a broadband-only biz, without the distraction from mobile (a market it didn't enter until 2010), might be a wise move.

"It was interesting to recall that during the last results presentation Dunstone admitted that he was unhappy with the numbers and that the company needed to focus on simplification," he said.

"Undeniably, TalkTalk is still recovering from the hack, but it had already outlined plans to scale back its ambitions in building an 'inside out' mobile network to instead invest in fixed-line."

He added: "I wonder if this is a reflection of an increasingly saturated MVNO market, which is now seeing further competition from Vodafone and Three's sub-brands which are moving directly into their heartland."

A TalkTalk spokeswoman said: "We remain committed to offering our customers a compelling value-for-money mobile proposition, and following our announcement at our full-year results in May we are in advanced discussions with a number of potential partners, including O2, to agree a low touch retail arrangement that will enable us to continue to offer a competitive service to all our broadband customers." ®

Sign up to our NewsletterGet IT in your inbox daily


More from The Register

TalkTalk, UK2 sitting in a tree, not T-A-L-K-I-N-G: Hosting biz cut off after ISP broadband upgrade

Updated 'Not an issue with our network', say techies

TalkTalk shrugs off moaning customers to claim 80,000 more

Back in black

TalkTalk ups the (dis)satisfaction ante as UK folk wake up to borked email

New approach to dealing with complaints working wonders

Please come back! TalkTalk woos customers with broadband offers

Competitors are raising prices. Who knows, it could work

TalkTalk starts offering punters choice to shift-shift to O2

A 'great' deal - as long as you stay with their crummy broadband

ISP TalkTalk's Wi-Fi passwords Walk Walk thanks to Awks Awks router security hole

Brit broadband biz has only had four years to patch up WPS

TalkTalk plans to sell family B2B jewel to Daisy Group for £175m

Swings into £79m loss-loss in prelim fy18 results

TalkTalk to splash £1.5bn laying full fibre on 3 million doorsteps

Shares drop 12% as biz slashes dividends to raise capital

In a surprise to no one, BT and TalkTalk top Ofcom's whinge-list

'Some providers still not doing enough,' says regulator

Take a bow, TalkTalk, Post Office, Vodafone! You win most-whinged-about telcos award

Regulator figures show Sky, Tesco users as most content