UK telecoms provider TalkTalk Group has confirmed plans to relocate its headquarters from London to Salford to support its next phase of growth. It has also announced the creation of a new company called FibreNation to roll out full-fibre broadband to three million homes and premises. The news comes as TalkTalk published interim results showing a seventh consecutive quarter of growth, adding more than 100,000 customers over the six months.
The first three areas to benefit from FibreNation's roll-out will be Harrogate, Ripon and Knaresborough. This builds on the company full-fibre network trial in York, with the combined footprint reaching over 100,000 premises. TalkTalk will be the first FibreNation customer, wholesaling network access to sell full-fibre services to customers. TalkTalk and Sky are both wholesale customers on the York network, and Sky will remain a wholesale customer of the network in the expanded footprint.
York and other fibre assets wholly-owned by TalkTalk will transfer to the new company. TalkTalk is in talks with potential partners, including Infracapital, to develop a long-term capital structure for FibreNation. TalkTalk and Infracapital have decided not to proceed with their agreement announced in February.
The move from London to Salford is part of TalkTalk's strategy to simplify operations. Several hundred existing roles will be relocated from London in 2019, with new posts also being created in part through the expansion of the graduate and apprenticeship schemes. This will be the company's second major investment in the north west since 2017, when it opened large office in Salford to house the technology and business teams.
For the six months ending 30 September, TalkTalk added 104,000 customers, compared to 46,000 additions a year earlier, to reach a total of 4.24 million. Customer net additions for Q2 were 24,000, compared to 26,000 in the year-earlier quarter, with growth in both consumer and B2B. Churn was 1.2 percent for the first half, down slightly from 1.3 percent in the year-earlier period, with Q2 the lowest ever quarter at 1.1 percent. Fibre net additions reached 192,000 for the six months and a record 125,000 in Q2.
Total headline revenue for the first half was up 3.9 percent to GBP 771 million (excluding carrier and off-net), with Q2 headline revenue up 3.7 percent. Statutory revenue was down 0.6 percent to GBP 822 million for the six months, from GBP 827 million previously, mainly due to exiting a MVNO proposition.
Headline EBITDA for the half rose to GBP 101 million from GBP 75 million a year earlier, and statutory operating profit reached GBP 19 million, compared to a year-earlier operating loss of GBP 62 million. Statutory loss before taxation was GBP 4 million, narrowing from a GBP 95 million loss previously.
For full-year 2019, TalkTalk expects headline EBITDA to be in line with expectations, with headline revenue growth, ongoing consumer ARPU growth and stabilising group ARPU. It is forecasting over 150,000 broadband net additions for the year.
