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TalkTalk’s York FTTP broadband roll-out to go nationwide
Following successful delivery of an ultrafast FTTP broadband network in York, TalkTalk is planning to start work on a £1.5bn national roll-out
Internet services provider (ISP) TalkTalk is in discussions with Infracapital – the infrastructure equity investment wing of financial services organisation M&G Prudential – to set up a new company to roll out an ultrafast fibre-to-the-premises (FTTP) broadband network across the UK.
The proposed company would be 20% owned by TalkTalk and 80% by Infracapital, and will target three million residential and commercial properties in mid-sized towns and cities around the UK, with a potential equity investment of £500m enabling total investment of around £1.5bn.
TalkTalk will itself undertake an equity placing to raise £200m of additional capital to part fund the new business.
It will subsequently act as a founding wholesale customer of the new company and commit to a minimum volume of new customers.
The proposed roll-out will build on TalkTalk’s relatively successful roll out of a proof-of-concept urban FTTP network in York, which has already passed 14,000 properties and is currently being extended to 40,000 more.
TalkTalk executive chairman Charles Dunstone said: “By signing heads of terms with Infracapital, we are making good progress towards putting TalkTalk at the heart of Britain’s fibre future by building a full-fibre network, bringing faster, more reliable internet to millions of homes and businesses.”
Dunstone was speaking as TalkTalk unveiled its third quarter trading update in which it slashed its profit forecast from between £270m and £300m to between £230m and £245m, and cut the dividend it plans to pay to shareholders, causing a 10% tumble in its share price. Headline revenues of £388m were broadly flat.
Since the exposure of a massive data breach in its systems resulting in multiple fines from the Information Commissioners’ Office (ICO), TalkTalk – which also frequently tops “most complained about” broadband provider lists – has been hard at work trying to win back consumer trust and rebuild its value-for-money focused proposition.
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To some extent, this strategy appears to be paying off, with 37,000 net new customer adds during quarter, and customer churn reducing to 1.3%.
Chief executive Tristia Harrison said the firm could continue to make “significant” cost reductions in its ongoing attempt to radically simplify the business.