TalkTalk sees rising demand for its ‘working from home’ broadband as business begins to recover after Covid-19 hit
- Revenue fell to £358m in the three months to June 30 from £387m
- But trading bounced back in June and July, TallkTalk said
- Sales of its new ‘Business Grade Homeworker’ broadband package ‘strong’
The boss of TalkTalk said sales of its new ‘working from home’ broadband packages are ‘strong’ as remote working is here to stay, helping trade bounce back from the coronavirus slump.
The service, which allows employers to splash out on ‘business grade broadband for the home’ for staff stuck in their houses, was only launched recently but it’s in demand, the company said.
‘We are pleased to have launched our new “Business Grade Homeworker” packages for consumers and businesses, as the country adapts to working from home for the long-term,’ said chief executive Tristia Harrison said. ‘It is early days, but sales are strong.’
TalkTalk is pinning hopes on its broadband deal for long-term homeworkers
In a recent interview, Harrison said: ‘Traditional working is a thing of the past,’ adding she believes this will be how many companies operate in future, not just the next few months.
‘Up to 20 per cent more people are expected to now work from home. What is interesting is the UK has managed remarkably well at working from home during this period. And most places will be thinking how to learn from this. I think looking forward there will be a much more flexible culture.’
In today’s trading update, TalkTalk said the cancellation of live sport events and lockdown restrictions hit revenue in the second quarter, which fell to £358million in the three months to June 30 from £387million a year earlier.
It also saw a sharp fall in the number of new fibre broadband customers it added on a net basis – at 67,000 in its first quarter against 118,000 a year earlier. And it is expecting a full-year hit of £15million from the coronavirus crisis.
But trading picked up again in June and July, thanks to demand for its home working packages as well as demand for video streaming and online game traffic.
That, and cost savings, means the company is now expecting profit for the year to be flat or to grow – and improvement on its previous forecast of just flat profit.
TalkTalk shares have fallen 1.5 per cent to 78.30p.
‘As with many businesses, we have seen a short-term Covid-19 impact, primarily due to lockdown trading restrictions and cancellation of live sports,’ Harrison said.
‘Revenue, fibre net adds and ARPU (average revenue per user) trends have all improved in June and July as lockdown restrictions have eased.
‘Encouragingly, customer payment trends are in line with the pre-Covid-19 period.’
‘Traditional working is a thing of the past’: TalkTalk chief executive Tristia Harrison
CEO Tristia Harrison said TalkTalk was strengthening its outlook based on the recovery it was seeing in trading and costs. “We’ve seen huge surges in demand driven by video, gaming and homeworking,” she said.
TalkTalk’s revenue was hit during lockdown by a industry-wide drop in customer acquisitions and connections, a continuing decline in voice calls and the cancellation of sporting events.
“Through June and July we’ve bounced back very strongly, our fibre growth is back up, our ethernet – which is our B2B business – is back up, we are seeing good green shoots on revenue and really importantly, we’ve been able to drive incremental and ongoing costs savings,” she said.
TalkTalk will this month launch full fibre to the premises plans via BT’s Openreach network, she said.
The company was still in talks with Openreach about a new wholesale deal, she said, adding: “In terms of a long-term agreement, it will take a bit of time.”
Shares in TalkTalk reversed early gains to trade down 3% at 76.3 pence at 0800 GMT.
($1 = 0.7882 pounds) (Reporting by Paul Sandle; editing by Sarah Young)