23rd Jul 2014 08:01
LONDON (Alliance News) - TalkTalk Telecom Group PLC said Wednesday that it is on track to meet its financial year 2015 guidance and medium-term financial targets, as it saw revenue rise in the first quarter to end-June.
The telecommunications company said revenues in the quarter rose to GBP434 million from GBP421 million in the previous year, with its on-network revenue - meaning revenue from using its own equipment, as opposed to wholesale arrangements - rising to GBP322 million from GBP306 million.
Average revenue per user was broadly flat at GBP26.36, compared to GBP26.28 in the previous year.
The company said it had completed its GBP819 million refinancing, via a private placing programme and bank debt, ahead of existing facilities maturing in 2015.
TalkTalk reiterated its guidance for the full year, expecting revenues to grow by at least 4%, modest growth in net adds, and dividend growth of no less than 15%.
The company added 10,000 total broadband net adds during the quarter, as its fully unbundled customer base rose by 45,000 customers and its legacy partially unbundled and off-network customer bases continued to fall by 22,000 and 13,000, respectively.
TalkTalk added 185,000 new customers to its television customer base during the quarter, taking its total TV customers to 1.1 million. The company said its content offering continues to develop, as it built on its existing wholesale relationship with British Sky Broadcasting PLC. It has agreed a new multi-year distribution deal with the company to extend the distribution of BSkyB's movie and sports content.
TalkTalk added 24,000 mobile customers during the quarter and 34,000 new fibre customers. Demand for its fibre products remained modest, TalkTalk said, except for customers who significantly benefit from a switch to fibre due to low existing internet speeds. It expects demand for fibre products to grow as awareness of the product grows.
The company also noted UK telecoms regulator Ofcom's proposed margin squeeze test for the fibre market during 2014, which TalkTalk expects to lead to lower wholesale fibre costs "in due course."
TalkTalk provided an update on the progress of its joint venture with BSkyB and CityFibre Infrastructure Holdings PLC to build a new fibre network in the city of York, saying its plans were "progressing well."
It has completed the initial planning phase for the first area of the city, and has begun recruiting engineers for a larger trial later in the summer following an initial, smaller trial. It is on track to begin connecting homes and businesses in 2015, it said.
Shares in TalkTalk were trading up 0.10 pence at 320.10p Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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