TalkTalk


TalkTalk
TalkTalk Telecom Group PLC
Type Public limited company
Traded as LSETALK
Industry Telecommunications
Founded 2003 (Leeds)
Headquarters London, United Kingdom
Area served United Kingdom
Key people Charles Dunstone (Chairman)
Dido Harding (CEO)
Products Fixed line and mobile telephony, Internet services, digital television
Revenue £1,686 million (2010)[1]
Operating income £221 million (2010)[1]
Net income £(3) million (2010)[1]
Subsidiaries AOL Broadband
TalkTalk Business
Website www.talktalk.co.uk

TalkTalk (officially TalkTalk Telecom Group PLC) is a pay television, telecommunications and internet service provider company headquartered in London, United Kingdom. It was founded in 2003 as a subsidiary of The Carphone Warehouse plc[2] and was demerged as a standalone company in March 2010.[3]

Originally solely a fixed landline provider, TalkTalk now operates and sells broadband, home phone and mobile packages to UK customers under the TalkTalk and AOL Broadband brands. The company also provides services to business customers under the TalkTalk Business brand. Like some other UK broadband providers on the ADSL network, TalkTalk has invested in its own exchange infrastructure, known as Local Loop Unbundling (LLU), with 72% of its customers base unbundled as of December 2009.[4]

TalkTalk is listed is on the London Stock Exchange and is a constituent of the FTSE 250 Index.

Contents

History

TalkTalk launched in February 2003 after the acquisition of Opal Telecom in November 2002. The acquisition meant The Carphone Warehouse now had its own switching network providing access to BT Wholesale's landline network for the first time. An initial trial was conducted in the Manchester region. Three months later, TalkTalk was launched with the slogan "landline calls for less", and a guarantee that calls would be cheaper than with their perceived chief competitor, British Telecom.

Several high profile TV advertising campaigns commenced in 2003, initially under the first TalkTalk brand utilising the former public face of BT, Maureen Lipman. It appeared that TalkTalk was going head to head with BT with the slogan "It's good to Talk, but it's better to TalkTalk", mocking BT's "It's good to Talk" slogan. In the following years TalkTalk invested heavily in TV advertising and has won several awards for creativity. TalkTalk Broadband was subsequently launched in November 2004.[5] The free broadband offer was later launched in April 2006.[6] The company was criticised several times for making exaggerated claims such as "Free Broadband Forever" which later turned out to be misleading.[7] The company purchased Xtra of Spain for £11.6m.[8][9]

  • "On 8 March 2004, the Group acquired 100% of the issued share capital of Xtra Telecom SA, a fixed line service provider registered in Spain, for an initial gross consideration of £7.5m, with a further contingent deferred consideration expected to be up to £4.1m payable over two years."
  • "On 1 March 2005, the Group acquired 100% of the issued share capital of One Stop Phone Shop Limited, a company registered in England and Wales that specialises in the mobile 'off-the-page' market, for an initial gross cash consideration of £8.3m, with a further contingent deferred consideration of up to £6.7m payable over two years."
  • "On 16 December 2005, the Group acquired 100% of the issued share capital of Tele2 UK Communications Limited (Tele2 UK), a company registered in Englandand Wales, for a gross cash consideration of £11.5m. Tele2 UK is involved in the provision of telecommunications services to residential customers."
  • "On 19 December 2005, the Group acquired 100% of the issued share capital of Centrica Telecommunications Limited, Onetel Limited, Telco Holdings Limited, Awardmodel Limited and their subsidiaries (Onetel), all of which are registered in England and Wales, for a gross cash consideration of £169.6m. Onetel is involved in the provision of telecommunications services to both residential and business customers."

The acquisitions of Tele2's operations in the UK for £11.5m[10] and One.Tel for £169.6m[10] culminated in TalkTalk now having 2.5m customers. The Carphone Warehouse purchased the UK ISP business of AOL in October 2006 for £370m and renamed it AOL Broadband.[11] In June 2009 a £236 million deal to purchase the UK division of Tiscali by The Carphone Warehouse was approved by the European Union Competition Commission.[12][13] The acquisition was completed on 6 July 2009 with the business becoming part of TalkTalk.[14] At the time Carphone Warehouse announced that TalkTalk would be spun out from the group as a separate listed company, with the Tiscali, AOL Broadband and TalkTalk brands all coming together as one brand eventually.[15][16][17] According to the January 2009 financial announcement by Carphone Warehouse plc, TalkTalk had 2.7 million customers.[18] The Carphone Warehouse's full-year earnings statement in November 2009 revealed the TalkTalk customer base had risen to 4.12 million following the purchase of Tiscali UK earlier in the year.[19] TalkTalk was the sponsor of the sixth series of the The X Factor,[20] which started on 22 August 2009.[21] TalkTalk announced that a Tiscali UK service centre originally opened for Toucan in Sligo would be closed in 2010 with the loss of 160 jobs.[22] Some workers from the Sligo centre would be transferred to Waterford while the company is also advertising 60 new positions at Waterford.[23][24]. In 2011 TalkTalk launched HomeSafe, a network-level online security and website blocking system.[25] The free product is aimed at parents who want to filter web content such as pornography or violence. TalkTalk claims to be the first UK ISP to offer this functionality. In August 2011, TalkTalk were fined £3 million by the independent telecommunications regulator Ofcom for incorrectly billing over 65,000 customers between 1 January 2010 and 4 March 2011.[26] The company had been overcharging customers for services that had not received which resulted in the company paying an additional £2.5 million in refunds. Ofcom warned TalkTalk in November 2010 to rectify their billing problem after 62,000 incorrect bills were issued and were given a deadline which they did not meet. TalkTalk was announced as the most complained about telecommunications company for landline and broadband for 2011 by Ofcom.

Talk Talk Ireland Ltd.

Though Talk Talk never offered its services to customers in the Ireland. The company maintained a customer service centre in Waterford, Ireland until October 2011[27], which was originally set up for AOL UK and provided services for both companies. On September 7, 2011 it was announced by Talk Talk Ireland Ltd. that the call centre in the Republic of Ireland would cease operations within the next 30 days.[28]. It resulted in the loss of 575 jobs. It had been speculated in the Irish press that the jobs would later relocate to South-East Asia and the UK.[29] The Government of Ireland and its agencies have criticised how Talk Talk UK and its subsidiary Talk Talk Ireland Ltd. have dealt with the job losses.[30]

Previously, TalkTalk announced that a Tiscali UK service centre originally opened for Toucan in Sligo would be closed in 2010 with the loss of 160 jobs.[31] Some workers from the Sligo centre would be transferred to Waterford while the company is also advertising 60 new positions at Waterford.[32][33]

The TalkTalk call centre closed its doors in Waterford on October 7, 2011, with the loss of over 570 jobs[34].

Operations

Broadband and telephone

The company has operated broadband and landline telephone services since it first launched. Following the purchase of the UK ISP division of AOL, broadband services under the AOL Broadband brand are also provided, with some AOL content partnerships available for TalkTalk customers.

Tiscali UK provided telephone and broadband services both bundled and separate until being rebranded on 7 January 2010. On this day the company closed to new business.[35] TalkTalk announced in December 2009 that customers with just broadband services would be encouraged to subscribe to a telephone service or pay an extra £5 monthly charge.[36] The Tiscali portal content moved to the TalkTalk website, while the company name remained Tiscali UK Limited trading as TalkTalk.[37]

Television

TalkTalk inherited the IPTV service from Tiscali and renamed it TalkTalk TV in January 2010. The service had originally launched in London as Homechoice in 2001. TalkTalk is also a partner in the forthcoming TV venture YouView.

Mobile

TalkTalk also has a mobile virtual network operator (MVNO), which is called TalkTalk Mobile.[38]

Opposition to UK anti-piracy laws

TalkTalk have openly stated that they will refuse to send warning letters to their customers, or hand over any of their personal information, even if it became a legal requirement for them to do so.[39][40] TalkTalk say that the UK "government's plans to punish people suspected of illegal downloading are an assault on human rights",[41] and pledged to fight government anti-piracy laws.[42] In 2010, TalkTalk launched a major campaign, Don't Disconnect Us, against government plans to disconnect users suspected of repeat copyright infringement.[43]

Controversies

Sponsorship

In 2004, TalkTalk won the sponsorship rights to Big Brother from the UK mobile firm O2. Sponsorship continued until the racial controversy of Celebrity Big Brother in 2007 after which the company retracted its sponsorship agreement.[44]

Telecom sales

In 2005 TalkTalk was accused of using the practice of telephone slamming (changing consumers' residential phone line over to a new provider without their consent).[45] Some cases were linked to instances of mis-selling by sales people on the doorstep or by telephone; other consumers reported that their personal data had been misused after buying mobile telephones from Carphone Warehouse.[46] These sales techniques exploited a loophole in British law which allowed consumers to change telecom service providers more easily. In 2011, it was again accused of the practice of slamming, a fact reported on the BBC Watchdog Television program on Tuesday 24 May 2011.

"Free" broadband

In 2006 TalkTalk launched a promotion offering free broadband. The promotion attracted criticism when demand outstripped supply and the network systems were unable to cope with the consumer response.

April 2006

On 11 April 2006, TalkTalk started offering a free broadband service (up to 8 Mbit/s with a 40 GB monthly usage limit) for life to all subscribers to their Talk3 International telephone tariff at £20.99/month. Conditions included signing up to a minimum 18 month contract and a £29.99 connection fee.[6]

July 2006

The Advertising Standards Authority (ASA) challenged TalkTalk on their free broadband offer.[47] Soon after this challenge, TalkTalk began to offer free broadband on their cheaper Talk3 tariff. This allowed people to have unlimited telephone calls, broadband and line rental for £19.99 a month. This offer was available to new and existing customers, though broadband was only free for customers connected to a Local loop unbundling (LLU) exchange. As of July 2006, TalkTalk claimed that free broadband was available to 70% of the UK population. They hope that this figure will increase as British Telecom allow the unbundling of their remaining exchanges. Customers not on an unbundled exchange are charged a monthly fee for broadband access. Many users of TalkTalk Broadband do not experience the full 8 Mbit/s speed, as this depends on the extent to which the user's local exchange has been unbundled, and (as with all ADSL services) the distance from the exchange. Users not on unbundled exchanges get a fixed speed service at 0.5, 1 or 2M and not "up to 8M".

Some experts predicted this might provoke a UK broadband price war.[48] Shortly following this report, Orange began to offer free broadband to users of their monthly mobile phone contracts, and Sky also began offering a variety of free or very cheap broadband packages to their subscribers.

Due to the unexpectedly high number of customers who signed up to the free broadband service, the launch suffered complaints with regard to a long waiting list to join the broadband programme and many difficulties in contacting TalkTalk customer services. In a Sunday Times interview, Charles Dunstone admitted that Carphone's TalkTalk business was "struggling to cope" with the more than 400,000 customers who signed up for high-speed internet access since the service launched in April. He also compared TalkTalk Broadband to "a little baby who’s waking up every two hours and is disturbing the family and making our lives a nightmare."[49]

September 2006

TalkTalk allowed customers to escape the binding 18-month contract for broadband "if it had failed to keep its service commitments in their case".[50]

October 2006

On the BBC programme Watchdog (3 October 2006), Charles Dunstone stated "I got it wrong. I didn't realise that free broadband was going to have the effect on people it has."[51]

November 2006

To the Mail on Sunday Charles Dunstone stated "In about 20% of customers there is some kind of problem with the phone exchange, the line, or something else. There is no point trying to pretend everything is all right. Our business exploded and we compressed the problems everyone in the industry has had into a few months. It has given customers nightmares and I just can't ignore complaints."[52][53]

A customer satisfaction poll by uSwitch places TalkTalk and Orange joint bottom for customer satisfaction.[54]

January 2007

The published figures show that by the third quarter of 2006, 540,000 users had been subscribed to TalkTalk broadband of which 132,000 were (TalkTalk) LLU lines.[55] In the third quarter trading update, the published figure was 413,000 customers unbundled, including 281,000 AOL Broadband customers.[56]

Roger Taylor (CFO) reported that the number of TalkTalk Broadband customers was lower than expected, but was forecasting 700,000 customers on unbundled lines (LLU) by March 2007.[55]

In response to the sign up rate halving, The Carphone Warehouse has introduced a free 30 day trial for broadband customers. Charles Dunstone told staff this week that the free trial was "an attempt to give people the confidence to try it, despite what they might have heard". Customers will be able to cancel the contract within 30 days without incurring a penalty.[57]

Data pimping

In early 2008 it was announced that TalkTalk had entered into an agreement (along with BT and Virgin Media) with the former spyware company Phorm to intercept and analyse their users' click-stream data, and sell the anonymised aggregate information as part of Phorm's OIX advertising service.[58][59] At the time, TalkTalk confirmed that the new Phorm system, when implemented, would be a strictly opt-in service.[60] In July 2009, Charles Dunstone, CEO of TalkTalk Group announced that TalkTalk had withdrawn plans to introduce Phorm, along with a similar announcement from BT in the same week.[61]

TalkTalk now use EDEH (Enhanced DNS Error Handling)[citation needed] which suggests sites if the entered URL does not exist and UEI (Usage Exchange Initiative) which exchanges their customers' anonymised usage data with a third party for market research purposes. These settings are defaulted to Opt-in to allow TalkTalk to force these "services" onto the user, but can be set to Opt-out. The settings are found in your Manage My Account / Personal details section of your account.

Broadband speed

In a study carried out by UK telecoms regulator Ofcom in 2010, TalkTalk was found to have average speeds of 7.7-9.3 Mbit/sec[62]

Digital Economy Bill

TalkTalk has been the most vocal ISPs against the introduction of the Digital Economy Bill.[63] TalkTalk released a video protesting against the law called "Home taping is killing music"[64] Upon the passing of the bill TalkTalk issued a statement on the company blog which made it clear that the company would resist attempts to use the bill against their customers.

We stand by our pledges to our customers:

  • Unless we are served with a court order we will never surrender a customer’s details to rightsholders. We are the only major ISP to have taken this stance and we will maintain it.
  • If we are instructed to disconnect an account due to alleged copyright infringement we will refuse to do so and tell the rightsholders we’ll see them in court.[65]

URL interception

On July 26, 2010 The Register reported that TalkTalk had begun harvesting URLs accessed by TalkTalk customers as part of a new anti-malware system it is developing in conjunction with Huawei, the manufacturer of its network servers. When a user accesses a web page, the URL is harvested and the servers issue the same URL request with the intention of checking the site for malicious code. TalkTalk claims[66] that no personally identifiable information is being harvested however, like Phorm, some users argue there are some potential legal issues with this harvesting of information. Under relevant UK legislation, URLs are deemed communications content and interception without permission is prohibited.[67][68]

Advertising

The previous television advertising campaign used a 60s song by blue-eyed soul band, The Box Tops called Neon Rainbow.

References

  1. ^ a b c Annual Report 2010
  2. ^ Carphone TalkTalk Launch Press Release, February 2003
  3. ^ Potter, Mark (29 March 2010). "Best Buy eyes May UK launch; Carphone demerger". Reuters. http://www.reuters.com/article/businessNews/idUSTRE62S1OK20100329. Retrieved 29 March 2010. 
  4. ^ "Corporate information". TalkTalk Telecom Group PLC. http://www.talktalkgroup.com/corporate-information/. Retrieved 29 March 2010. 
  5. ^ "The Carphone Warehouse launches TalkTalk Broadband" (Press release). The Carphone Warehouse. 1 November 2004. http://www.talktalk.co.uk/talktalk/servlet/gben-server-PageServer?article=MAIN.UK.TALKTALK.COMPINFO.PRESS.2004.BBANDLAUNCH. Retrieved 2006-11-08. 
  6. ^ a b "Free broadband forever" (Press release). The Carphone Warehouse. 11 April 2006. http://www.talktalk.co.uk/talktalk/servlet/gben-server-PageServer?article=MAIN.UK.TALKTALK.COMPINFO.PRESS.2006.FREE. Retrieved 2006-11-08. 
  7. ^ ASA Adjudication
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  12. ^ Carphone buys Tiscali's UK broadband business for £236m Daily Tepegraph
  13. ^ UPDATE 1-Carphone wins EU approval for Tiscali UK buy Reuters. 30 June 2009
  14. ^ RNS - Completion of Tiscali Acquisition
  15. ^ Carphone Warehouse plans to split BBC News. 22 April 2009
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  35. ^ Carphone announces death of Tiscali UK David Meyer. ZDNet UK. 7 January 2010
  36. ^ Tiscali to rebrand as TalkTalk in January Which? 18 December 2009
  37. ^ TalkTalk UK Information entertainment broadband email and internet access TalkTalk
  38. ^ "TalkTalk and Vodafone UK announce new MVNO partnership". http://www.talktalkgroup.com/press-centre/30-07-10-vodafone.html. 
  39. ^ Talktalkblog.co.uk, Digital Economy Bill. It's a wash up.
  40. ^ Electricpig.co.uk, TalkTalk boss says it will fight government anti-piracy plans.
  41. ^ Broadbandchoices.co.uk, TalkTalk says piracy law infringes human rights
  42. ^ Electricpig.co.uk
  43. ^ Dontdisconnectus.us
  44. ^ The Register, Carphone Warehouse Pulls BB Sponsorship
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  51. ^ "Watchdog viewers have been complaining all summer about Talk Talk. It seems the company's broadband revolution stalls on customer service.". Talk Talk broadband. BBC. 3 October 2006. http://www.bbc.co.uk/consumer/tv_and_radio/watchdog/reports/internet/internet_20061003.shtml. Retrieved 2006-11-01. 
  52. ^ "The Sunday interview: Charles Dunstone (the TalkTalk man)". Mail on Sunday. 5 November 2006. http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=414385&in_page_id=3. Retrieved 2006-11-06. 
  53. ^ "TalkTalk Free Broadband "a disturbing nightmare" says CEO". CNET. 8 November 2006. http://crave.cnet.co.uk/desktops/0,39029426,49285066,00.htm. Retrieved 2006-11-08. 
  54. ^ "Punters suffer in broadband price war". The Register. 14 November 2006. http://www.theregister.co.uk/2006/11/14/uswitch_survey_oct. Retrieved 2006-11-14. 
  55. ^ a b "Carphone gets mixed reception as broadband stalls". Reuters. 12 January 2007. http://today.reuters.co.uk/news/articlebusiness.aspx?type=businessNews&storyID=2007-01-12T090048Z_01_LAD002758_RTRUKOC_0_UK-CARPHONE-TRADING.xml. Retrieved 2007-01-12. 
  56. ^ "Carphone Warehouse Trading Update, Released: 12/01/2007". CPW. 12 January 2007. http://www.cpwplc.com/cpw/ir/lse/rnsitem?id=1168585296nRNSL4202P. Retrieved 2007-01-12. [dead link]
  57. ^ "Carphone plugs TalkTalk". Noble House Media Ltd, Mobile Today. 16 January 2007. http://www.mobiletoday.co.uk/content/15539.asp?men=2&sub=3. Retrieved 2007-01-17. [dead link]
  58. ^ ISP data deal with former 'spyware' boss triggers privacy fears
  59. ^ How Phorm plans to tap your internet connection
  60. ^ TalkTalk make Phorm Opt-In
  61. ^ Phorm stranded as BT and Carphone pull plug on online ‘spying’ technology The Times, 7 July 2009
  62. ^ Ofcom | UK fixed broadband speeds, November/December 2010
  63. ^ Barnett, Emma (26 January 2010). "TalkTalk 'would fight Digital Economy Bill in court'". The Daily Telegraph (London). http://www.telegraph.co.uk/technology/7079982/TalkTalk-would-fight-Digital-Economy-Bill-in-court.html. Retrieved 24 May 2010. 
  64. ^ Youtube.com
  65. ^ Talktalkblog.co.uk
  66. ^ TalkTalk responds to anti-malware security questions
  67. ^ TalkTalk turns StalkStalk to build malware blocker
  68. ^ Customer outrage over TalkTalk monitoring web use

External links



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