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New additions down but LLU on the up
(10-10-07) - Carphone Warehouse, Europe’s biggest mobile provider, announced a total broadband customer base of 2.5 million in its second quarter results today.
The company, which owns both the AOL (www.AOL.co.uk) and TalkTalk (www.TalkTalk.co.uk) brands added only 89,000 new connections in the 13 weeks to 29 September 2007 - lower than analysts had predicted.
Increased competition from big providers such as Sky (www.Sky.com) and Virgin Media (www.VirginMedia.com) is thought to be behind the drop from 126,000 new additions in the previous quarter.
However, the company also revealed that having unbundled a further 500 BT exchanges, it has now moved 55 per cent of its broadband customers away from BT (www.BT.com) and onto its unbundled (LLU) network, allowing it to offer more competitive prices while increasing profits at the same time. AOL and TalkTalk now have 2,212 exchanges unbundled in total.
Charles Dunstone, CEO, said: “I am very pleased with the progress we have made in our fixed line business. We now have over one million TalkTalk broadband customers, while the focus in AOL has been on customer migrations and network roll-out.
“As a result, over 80 per cent of all new broadband customers are now connected directly to our own network. We are well ahead of schedule for migrating existing customers to our own network; we have the most extensive unbundled coverage in the UK; and customer service unit costs are falling as our processes improve.”
Despite the positive statement from Mr Dunstone, Michael Phillips, BroadbandChoices.co.uk product director, warned that with the first TalkTalk customers free from their 18 month contracts tomorrow, the outlook could soon change.
“TalkTalk revolutionised the market with its ‘free’ broadband 18 months ago, but after its well documented problems it remains to be seen how many customers will choose to remain with the company once they’re free of their contractual duties,” he said.
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