TalkTalk Brand Rural Broadband Plan ‘Legally Questionable’

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  1. TalkTalk Brand Rural Broadband Plan ‘Legally Questionable’

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    Few can deny that the UK’s rural areas could benefit from improved broadband services. Indeed, if you happen to live in the country or have been to visit somebody who does, you’ll likely have been shocked by the speeds on offer.

    It’s an issue that the government know all too well, which is why they’ve made plans to improve broadband for rural areas. However, that is now under threat as TalkTalk branded it “legally questionable”, over plans to allow BT to recover the costs of the upgrades through higher wholesale charges – something which would affect companies like TalkTalk.

    The comment came from none other than TalkTalk chief executive Trista Harrison, and is being viewed as a threat to launch High Court action to block the scheme, unless the government’s plans change.

    Ms Harrison made her comments after Ofcom announced that the cost of providing effective broadband to 1.4 million homes would add just shy of £2 per line a year to wholesale charges across the country.

    For their part, BT have offered to front costs of between £450m and £600m in exchange for the freedom to increase prices. They want to install new technology which will deliver data over long telephone lines at more than 10Mbps, which Ofcom say is the minimum speed that everyday services like Netflix need to operate.

    Ms Harrison said: “We fully back the Government’s ambition to give every home decent broadband as quickly as possible, but the current offer on the table is legally questionable, and will be more complicated and more expensive to implement than it may at first appear.

    “It’s critical Government and Ofcom stand up for customers, and deliver high speed broadband for everyone, in a transparent and cost-effective way that preserves competition.

    “Without a level playing field or properly regulated fibre prices, there is a real risk that investment in Britain’s full-fibre future will be jeopardised.”

    TalkTalk have previously claimed that the bill gives BT too much license, and could mean that the annual cost of broadband per line could rise by as much as £20. Ofcom believes it would add just 39p to bills next year, followed by £1.19 in 2019 and then £1.93 in 2020.

    Nevertheless, the plans are highly controversial within the telecoms industry. At present, BT’s Openreach division are in charge of hooking up the vast majority of new broadband lines to the network, which has left Openreach customers like TalkTalk and Sky concerned that their own equipment will be squeezed out of local exchanges, increasing their costs. They’re also frustrated that Virgin Media won’t be forced to cover any of the cost, because they own their own network.

    Government ministers haven’t yet committed to the plan, but they are said to favour an agreement in broadly the shape of the one discussed. What this could mean for TalkTalk customers is unclear, but increased costs would certainly drive plenty of angry customers towards the contact details for TalkTalk, and at a time when TalkTalk are attempting to revitalise their image with consumers, that would be a dangerous thing.

  2. TalkTalk Name Fourth CFO in 4 Years

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    Amid continued struggles, TalkTalk have announced that they’ve captured their fourth chief financial offer in four years, poaching Kate Ferry from Dixons Carphone, who will take office in the autumn.

    Ms Ferry comes to the company with a rich and storied history, with a career at Merrill Lynch as a specialist retail analyst behind her, as well as the top spot at Dixons Carphone. She’ll replace Iain Torrens in the latest move to revitalise TalkTalk, after Sir Charles Dunstone returned to the business he started within Carphone Warehouse.

    The company are still struggling with the fallout from the devastating 2015 cyber-attack which revealed critical security faults at the company and led to an astonishing number of customers leaving the service. On top, TalkTalk were made to pay out to customers, booking large exceptional costs along the way.

    Last year, the company recorded exceptional charges to the tune of £83m, as profits halved in the financial year. Torrens left the issuance of the company’s first bond, raising £400m in April, though his performance has been deemed unsatisfactory, joining the likes of Steve Makin who lasted only a year in the role and Amy Stirling, who enjoyed 7 years at the company when she left in 2013.

    Sir Charles Dunstone is a long-time fan of Ms Ferry, having worked closely with her during their joint time at Dixons Carphone.

    Sir Charles said: “As we continue our journey under the new leadership team and with a refocused direction, Kate brings a wealth of experience to the role. Her skills will work really well at TalkTalk and we’re looking forward to working with her as we focus on delivering our new and exciting plan for the business.”

    Sam McHugh, an analyst with Exane BNP, said: “TalkTalk are not a company known for meeting financial guidance — having disappointed on multiple occasions in the past. If Ms Ferry can come in with a cleaner and achievable message and guidance for investors over the medium term, then this could end up being a positive for TalkTalk.”

    The news comes after hundreds of customers chose to contact TalkTalk over TalkTalk broadband outages last week. According to reports, extensive damage was caused to fibre optic cables by a third party, operating digging equipment.

    The downtime affected customers connected to the Seaford, Newhaven, Herstmonceux, Ninfield and Polegate exchanges and took TalkTalk broadband, phone and TV services down for over 24 hours, leading to a high number of complaints.

    TalkTalk have recently relaunched their service, greatly simplifying their offering and redoubling their efforts around their original remit – being the go-to low cost supplier for essential services like broadband. That’s resulted in a near-complete relaunch of the brand, with simplified packages, pricing structures and advertising. Only time will tell whether that’s enough to reverse the fortunes of the one-time upstart, but it’s an important first step to take.

  3. TalkTalk Speak of Falling Profits in 2017-18

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    TalkTalk are in the midst of a rebuilding job following years of falling subscriber numbers and a series of damaging leaks which put consumer data at risk. The plan, spearheaded by Sir Charles Dunstone, is designed to restore TalkTalk’s reputation as a consumer-first challenger in the UK’s broadband market.

    His strategy was unveiled as the telecoms group cut its dividend and warned that earnings wouldn’t be as healthy as they were in in 2016-17, thanks to the added investment required after the 2015 hack which revealed customer data and forced the company to accept the cancellation of thousands of contracts, as well as providing compensation to customers.

    Upon the news being release, shares at TalkTalk fell a staggering 17%, before rebounding to end the day at -9%.

    So, what does this new strategy involve? Well, as you might imagine it calls for a move back to what TalkTalk has traditionally done best – act as a budget competitor to the big and unwieldy telecoms companies.

    Today, the likes of Virgin, BT and Sky are all positioning themselves as “quad-play” suppliers, who offer TV, broadband, mobile and home phone. Sir Charles believes that the rise of Netflix-like streaming services has meant that not every customer is going to want a tacked on TV package, and would only need a broadband subscription.

    Sir Charles said that TalkTalk began employing this strategy in the fourth quarter of 2016, a quarter in which TalkTalk reported a 22,000 increase in customers, against the run of play in the broadband market.

    Charles is making his comeback to the business after a multi-year absence from regular operations. Having originally build the business within Carphone Warehouse and launching it with free broadband, he’s now taking on a more hands-on role after seeing his child stumble and the value of his shares in the company tumble.

    He said TalkTalk have to return to their “challenger” reputation if they want to compete going forward, highlighting the extremely aggressive approach of T-Mobile in the United States as an inspiration. That business regularly call out other companies in the sector for shoddy practice and have rebuilt their reputation on bullish pricing and a cocky new stance.

    Revenue at TalkTalk fell 3% to £1.78bn in the year to March 31st, whilst pre-tax earnings rose 17 per cent to £304m. That profit fell well short of the company’s target of £320m-£360m, and it warned earnings would decline to within a range of £270m-£300m this year as they invested in customer growth.

    TalkTalk had almost 4.2 million customers before the cyber-attack in 2015, but they shed 230,000 customers as countless used the TalkTalk care number to cancel their contracts and many more declined to renew.

    Sir Charles said: “My focus for the company is growth, cash generation and profit ­in that order. We will be smart about how we invest, focusing on our fixed network, avoiding other capital-intensive distractions.”

    One such “capital intensive” distraction was their plan to build their own radio spectrum to offer mobile services, but Sir Charles has said that the group didn’t have the “bandwidth or resources” to compete with the likes of BT-EE. However, he did reiterate TalkTalk’s commitment to their ultra-fast broadband initiative and their TV service.

  4. TalkTalk Threaten Openreach Over Compensation

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    A fight looks to be on between TalkTalk and BT over the now-independent Openreach company, which could hold up a vital consultation regarding the future of the UK’s broadband infrastructure.

    In March, the telecoms regulator Ofcom imposed a record breaking fine on BT for widescale broadband installation failings between 2013 and 2014, to the tune of £42m in direct fines. At the same time, BT Openreach were ordered to pay out £300m in compensation to communications providers like TalkTalk, Vodafone, Sky and Virgin who relied on BT Openreach’s appalling service.

    TalkTalk, who have struggled since the crippling hacks brought them to their knees in 2015, had imagined that they’d be in line for around £60m to £70m in compensation. However, it’s understood by City A.M that they’ve received an offer in the “mid-teens” of millions by Openreach.

    That’s an unacceptable sum for TalkTalk, who have seen record numbers of customers abandon them via the TalkTalk contact line after numerous scandals and constant failings on Openreach’s behalf when it came time to connect up new customers.

    Vodafone has opened talks with Openreach about their offer, whilst Sky (the biggest broadband provider in the UK) has yet to receive an offer from Openreach.

    Earlier in the month, Openreach launched a consultation asking broadband providers like TalkTalk how best to deliver universal broadband coverage for the UK, but these disagreements could put talks on hold, and potentially put Openreach behind schedule.

    The issue is said to be that the methodology for calculating compensation isn’t paid based on market share. Instead, it’s based on the number of lines ordered by ISPs, the number of times “deemed consent” was applies, and the rental cost of the lines.

    A spokesperson for Openreach reiterated its apology to ISPs, adding: “We will compensate all of the affected Communications Providers outside of BT in full, within twelve months.

    “Our settlement offer reflects Ofcom’s findings and methodology, and we are contacting those affected this month.”

    An Ofcom spokesperson said: “We expect all parties to engage constructively in the compensation process.”

    In response, TalkTalk’s largest shareholder, Sir Charles Dunstone, said what BT had offered as its share of the £300m was “significantly less” than what they were expecting, saying: “We can’t reconcile the £300m that they say it is going to cost them… Everything that we can see doesn’t seem to add up to a share of £300m.”

    For customers, it’s unclear what the compensation will mean. TalkTalk already moved to compensate customers who were affected by the hack, offering free TV, mobile and broadband to all customers.

    It’s suggested, therefore, that the compensation will be fed back into the company. They’ve been struggling as of late, despite a relaunch with simplified and cheaper plans for customers, and a significant cash injection could be just the ticket for seeing out the financial year in good health.

  5. What does TalkTalk’s New Plan mean for you?

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    There was once a time when TalkTalk were, forgive the pun, the talk of the town. Launched by Carphone Warehouse with a promise of cheaper phone calls and broadband than then-leading BT, the company caused quite a stir. The year was 2002 and over the next 13 years, the company would steadily increase their customer base to become one of the UK’s bigger broadband suppliers.

    That was, of course, until 12 months ago, when it was revealed the company had suffered a catastrophic cyber-attack which revealed over 150,000 customer banking and personal details. It was revealed that TalkTalk did not adequately secure their databases.

    That, combined with greater competition from rival suppliers, has meant that since 2010 TalkTalk’s market share has dwindled from 23% to 13%. So, in an effort to arrest the decline and reposition themselves once again as the upstarts in the industry, the company have launched a new plan. But what is it, and how will it affect you? Let’s take a look

    What changes are TalkTalk making?

    The major change that TalkTalk are making to their plans is the removal of line rental charges. Of course, this doesn’t mean that you stop paying them, it just means that from now on you are changed for just one product – broadband. This includes the price of your line rental, but TalkTalk will no longer advertise the two separately.

    It’s an important move for the purposes clarity, and it’s being backed by a price freeze for the next 18 months.

    Customers will be asked to move to a new contract that does away with the line rental charges and freezes prices, but you’ll have to accept the change first. The company have no right to force it upon you, and are asking customers to call the Talk Talk customer service number for more information.

    What does it mean for you?

    Most of all, it means simplified billing, however, it also means the price of your bill is going to change. The new deal will be cheaper for 60% of all households, TalkTalk have promised. However, it will feature a “modest” price increase for the rest. Whether that means an extra pound a month or £10 more, we simply do not know.

    However, customers who are worried about being put behind new customers need not worry, because the company are saying that existing customers’ loyalty will be rewarded by giving them the same deal as new subscribers.

    What does it mean for TalkTalk?

    For TalkTalk, this is a chance at a fresh start. The company took immense amounts of flak for their security measures last year and are in dire need of a new direction. These changes, along with new advertising which removes the gimmicks prevalent in their prior campaigns, help to present TalkTalk in a new, clearer light.

    Only time will tell whether TalkTalk are successful in their mission to reboot their brand and once again tack on new customers, but as far as we can tell, they’re on the right track.