TalkTalk says competition hitting British broadband market

TalkTalk said revenue grew by 3.5% year-on-year as strong growth in on-net and corporate offset the continuing decline in off-net revenues. TalkTalk, which said it remained on track for its full-year targets due to growth in its mobile offering, said the broadband market was softer than previously seen in recent quarters.

Today’s statement said: “We have made a good start to financial year 2016”.

This approach helped it to raise its two-year revenue growth target in May.

A tougher United Kingdom broadband market sent shares in telecoms firm TalkTalk (LON:TALK) nearly 7% lower in early deals as it unveiled first quarter numbers, which, otherwise, showed good progress.

“Against this background, the migration of Tesco broadband customers onto our network has begun well and we expect to complete the process over the remainder of FY16”.

Competition is ramping up in Britain’s broadband market, where providers have cut prices in the last three months to combat a sales slowdown, according to the fourth biggest player TalkTalk, whose shares dropped sharply.

As the company indicated at the time of our preliminary results in May, fiscal year 2016 EBITDA is expected to be the second-half weighted with revenue growth accelerating through the year against the first-half weighted operating costs. BT’s Openreach unit is in charge of the UK’s largest network of copper and fibre-optic telephone and broadband lines, and is used by rival broadband providers like Sky and TalkTalk, and by mobile phone companies to connect their masts.

It also announced that, as part of a cost-cutting exercise, the business plans to consolidate its North West operations into a single site at Manchester’s Soapworks development.