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Author Topic: TalkTalk Unveil UK FTTH Rollout Plan as Broadband Users Top 4.24m  (Read 350 times)


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The latest trading update from TalkTalk has revealed that the ISP increased their on-net broadband customers to total 4,243,000, which is up by +24K during quarter to the end of Sept 2018 (vs +80k in the previous quarter). On top of that they’ve unveiled the “FibreNation” roll-out plan for their “full fibre” (FTTH) network.

The past quarter has been a quiet one for the low cost ISP. So far the only real development of note was their decision to introduce a Great Connection Guarantee for new customers of their FTTC based “Faster Fibre” broadband services, which essentially enables customers to leave penalty free within the first 30 days of their service going live “if they’re not fully satisfied”.

Otherwise the provider today reported that they added +192,000 new “fibre” customers during the past six months (up from +188k in the previous 6 months). Overall 54% of their new customers are choosing to take a fibre service (up from 44%), although we should remind readers that this is dominated by their Openreach based FTTC  (hybrid fibre VDSL2) network and only a small FTTP deployment in York.

At the start of this year TalkTalk also announced tentative plans to roll-out a 1Gbps capable Fibre-to-the-Home (FTTH) network to 3 million UK premises, which was supported by an investment £1.5bn. This required them to establish a new company, which would be 20% owned by TalkTalk and 80% by Infracapital; the latter will contribute £400m and TalkTalk £100m (plus they will then take on c.£1bn in debt).

Sadly the provider has been almost completely silent on this proposal since it was announced, but today’s report confirms a number of significant developments.

    TalkTalk’s Key FTTH Developments

    * The ISP has setup FibreNation as a wholly owned full fibre wholesale provider to oversee construction of the new full fibre network and supply related services to providers.

    * The ISP confirms that their deal with Infracapital appears to have stalled (i.e. they “will not be progressing on the basis of the Heads of Terms, announced in February 2018“), which we believe relates to the recent reports concerning how the two sides were locked in a dispute over a valuation of the future network. However they’re still “in discussions with potential partners, including Infracapital, to develop an appropriate long-term capital structure for FibreNation.”

    * Despite the above situation, FibreNation expects to initially be rolling out full fibre to at most another 60,000 homes (it’s actually stated as between 50K to 60K) in three towns and cities: Harrogate, Knaresborough and Ripon. This will take place within the “next 12-18 months“.

    * When included with their existing “Ultra Fibre Optic” deployment to cover 54,000 premises in the city of York with FTTP (Cityfibre are building this for them), the new plan will expand their overall footprint to over 100,000 homes. The York deployment will of course also become part of FibreNation.

    * Interestingly the joint venture originally set up for the York trial and its assets are not being transferred, but Sky Broadband will remain a wholesale customer of the new network in the expanded footprint.

    Tristia Harrison, CEO of TalkTalk, said:

    “This has been a strong first half for TalkTalk, with continued broadband base growth and further progress as we become a simpler, more efficient business. Our Fairer Broadband commitment, focus on reliability and unique Fixed Low Price Plans continue to improve customer satisfaction and loyalty, resulting in our lowest ever churn in the second quarter. We remain on track to deliver our plan for the year, with growing Consumer ARPU and increasing revenue leading to strong EBITDA growth.

    With core business performance on track, we are today announcing two additional steps to position TalkTalk for the future. We are accelerating our full fibre strategy, launching a new company, FibreNation, which will expand our Gigabit broadband footprint to over 100,000 homes in the next 12-18 months.

    As we continue to radically simplify TalkTalk, we will also create a single main campus for the business in Salford. Having a single main home will reduce operational complexity and allow us to become a more efficient, focussed business, in turn supporting our long-term growth.”
« Last Edit: November 21, 2018, 10:30:51 AM by Bowdon »
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