Report Overview

TalkTalk UK Q1 2019/20 results: Slower but steadier

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­­­­TalkTalk suffered subscriber losses and falling consumer revenue growth in Q1, with churn still high despite the high speed base growing, countered by ARPU growing for the first time since 2017

The subscriber drop was, however, modest and looks quite deliberate, with there being evidence of price firming in both direct and indirect channels supporting both ARPU and margin

This more cautious approach, if it can be sustained, puts the company on a much more healthy footing in our view, allowing it to achieve its financial targets without increasingly unsustainable existing customer price rises

Contents

Subscriber base drops, but it looks deliberate

ARPU returns to growth, but subscriber and consumer revenue growth fall

New customer pricing firming up

EBITDA pressure eased… if pricing holds

List of charts/tables

Figure 1. TalkTalk broadband pricing, new customers

Figure 2. TalkTalk on-net net adds (000)

Figure 3. TalkTalk monthly on-net churn

Figure 4. Operating performance

Figure 5. Group revenue growth

Figure 6. TalkTalk price rises

Figure 7. Broadband entry level pricing, new customers (£/month)

Figure 8. Broadband high speed pricing, new customers (£/month)

Figure 9. TalkTalk current pricing

Figure 10. Incremental gross profit by product

Figure 11. EBITDA progression from FY 18/19 to guidance FY 19/20