Announcing its Q1 results, UK telco TalkTalk has confirmed the launch of Free TV for its TalkTalk Plus customers. Dido Harding, Chief Executive of TalkTalk, said customers would be able to pre-register immediately for their free YouView set-top box with no additional monthly subscription. The package also includes TalkTalk Player, 12 months free subscription to LOVEFiLM Instant, unlimited calls and unlimited data downloads. Unsubsidised YouView set-top boxes went on sale July 26th, with the Humax DTR-T1000 available for around £299 through John Lewis, Currys, Amazon, Comet, Argos, and other key UK independent electrical retailers, including the Euronics group and Richer Sounds.
“This compelling offer is the UK’s best value triple-play package. It will give our customers more reasons to stay with us for longer and attract new broadband customers. It will also deliver significant value for shareholders. This is TalkTalk at its disruptive best,” she claimed.
The company says the incremental cost of acquiring new triple-play customers of £140 will deliver positive EBITDA over the lifetime of the contract. Thereafter, it expects TV to reduce churn materially, expand its broadband market share, grow ARPU, and drive incremental value.
“In providing our customers with more reasons to stay with us for longer, and by cost effectively attracting new broadband customers, we believe our triple play strategy will add significant value to shareholders. The rate at which we drive triple-play penetration into our customer base will therefore be one of the key components in delivering our medium term financial targets of 2 per cent CAGR in revenue and 25 per cent EBITDA margin” said TalkTalk.
The company expects to launch a TV product for its ‘Essentials’ customers during 2013 and over time, expects the vast majority of its customers to have access to a triple-play proposition.
TalkTalk plans a carefully managed launch with a focus on operational excellence, providing an engineer-assisted installation (at a fee of £50 to the customer) during the initial roll-out phase. “Our engineers will ensure that customers’ in-home configurations are optimised for TV and broadband and they are made fully aware of the rich functionality of our set top boxes. Whilst this will inevitably limit the rate at which we can satisfy demand, it will ensure that we fully test and adjust our operational processes ahead of a scaled build that in due course, will allow customers to install their set top boxes themselves,” said TalkTalk.
TalkTalk has also struck a deal with BSkyB to offer all Sky Sports channels (including Live Formula 1), Sky Movies and Sky basic channels on a flexible, monthly basis.
Max Alexander, Managing Director of TV, TalkTalk, said: “Adding the line-up of Sky channels to our YouView service is great news for our customers. Being able to offer a range of the most popular premium channels with the flexibility of being able to purchase content one month at a time is going to be hugely popular with our base and offers a great value addition to our YouView service.”
Rob Webster, Director of Sky’s Commercial Group said: “As we continue to increase our investment in high-quality pay TV content, we want to achieve as broad a distribution as possible and grow our content related revenues. Following the conclusion of our successful negotiation with Talk Talk, we look forward to its customers enjoying the opportunity to subscribe to some of Sky’s best content.”
Talk Talk customers had previously been able to subscribe to some Sky channels directly through Sky’s ‘Sky by Wire’ service. These customers will migrate to Talk Talk’s pay TV service.
TalkTalk’s Q1 results revealed a 10 per cent growth year-on-year in fully unbundled customers, with continued strong take-up of Plus (+66,000 in Q1). Total revenue was £414 million, on-net revenue £285 million (+9.0 per cent year-on-year).