Latest news with #SirCharlesDunstone
Telegraph
3 days ago
- Business
- Telegraph
TalkTalk in row with Sky over fees as it battles customer exodus
TalkTalk is withholding millions of pounds from Sky as the struggling broadband provider battles an exodus of customers. The Telegraph has learnt that TalkTalk has been locked in a contractual dispute with Sky for a number of months over fees owed to the media giant. The dispute is understood to relate to Sky 's streaming service Now, which TalkTalk previously offered to its television customers as part of a bundled package with a single bill. The broadband company began phasing out this offering at the end of the last year. Sources close to TalkTalk insisted the dispute over volumes reflected changing viewing habits. The company also recently scrapped the option of including Netflix in its television packages. But it comes amid concerns about TalkTalk's finances as the broadband company grapples with large numbers of customers leaving. A source at one supplier said there was 'significant concern' about the company's ability to pay its bills. TalkTalk, which was founded by Sir Charles Dunstone, said it did not recognise this description of its finances. Suppliers squeezed TalkTalk's biggest supplier is Openreach, BT's network arm, which provides the underlying broadband connection for most of its customers. It is understood to be closely monitoring TalkTalk and its monthly payments. Suppliers to TalkTalk have previously been squeezed as the company struggled to shore up its finances. In 2023, the company extended its credit terms with some suppliers to as much as 300 days, while it has also made use of supply chain financing, which allows suppliers to obtain earlier payments via the company's bank. Companies that have faced late payments include The&Partnership, the advertising agency founded by Johnny Hornby, who also co-founded the Hawkstone beer brand with Jeremy Clarkson. Hornby is a personal friend of Sir Charles. While supplier terms are understood to have returned to normal, TalkTalk is facing fresh pressure on its top line. The company shed more than 400,000 customers in the year to February, taking its total to 3.2m. Customer losses follow heavy cost-cutting at the company, which has reduced marketing and customer acquisition costs by £50m. TalkTalk, which has traditionally been known as a discount broadband provider, is also facing tougher competition from a wave of challenger 'alt-net' firms that offer full-fibre services at cut-price rates. The shrinking customer base led to a 7pc fall in revenues to £1.4bn in 2024. This figure is forecast to drop further in the coming year. Meanwhile, TalkTalk slashed about 350 jobs last year, with further cuts expected in the coming year as the company prepares to roll out new customer service software from Octopus-owned Kraken. The figures underscore the continued pressure on TalkTalk's finances after it was rescued from collapse through an 11th-hour bailout. Sir Charles, TalkTalk's executive chairman, and other shareholders were forced to pump £235m into the company to stave off a looming debt default. The deal, which has given investment firm Ares significant control over TalkTalk, secured extensions to maturity deadlines covering about £1.2bn of debt. Looking for a buyer TalkTalk burnt through £285m last year, more than offsetting its emergency cash injection as it scrambled to pay back suppliers. The company is also still facing eye-watering debt costs. The company is now looking for a buyer for all or part of the business after breaking itself up into three divisions in 2023. It was previously in talks with Australian investment firm Macquarie about the sale of a stake in its wholesale unit for up to £500m, but a deal never materialised. Analysts have warned that the darkening financial outlook has made the prospect of dealmaking less likely. TalkTalk has said it plans to relaunch its offering to customers and will make further cost cuts as it shifts its customer base away from ageing copper networks to full fibre.
Telegraph
06-05-2025
- Business
- Telegraph
Exodus at TalkTalk as customers quit for broadband upgrades
TalkTalk has been hit by an exodus of customers as the struggling broadband business loses ground to rivals. The telecoms group, which is owned by billionaire Sir Charles Dunstone, saw its customer base fall by more than 400,000 to 3.2m in the year to February. It comes amid heavy cost-cutting at TalkTalk, which narrowly avoided collapse last year after securing an emergency cash injection from Sir Charles and other shareholders. TalkTalk slashed roughly 350 jobs in 2024, according to its latest accounts, with further cuts expected in the coming year. This helped to reduce operating costs by around £18m, while the company also cut back its marketing and customer acquisition costs by £50m. But the cost-cutting has led to further drops in customer numbers amid tough competition, as challenger 'alt-net' firms offer more attractive upgrades. While TalkTalk has traditionally been viewed as a cheaper broadband provider, it is now being undercut by rivals such as Vodafone and Sky. In a further challenge, mobile provider Giffgaff, which is owned by Virgin Media O2, is trialling a new full-fibre broadband service priced at just £10 a month. Meanwhile, TalkTalk burned through a further £285m last year, more than offsetting its £235m emergency cash injection. While last year's bailout secured the company's short-term future, the company is still facing questions over its long-term prospects as it grapples with a £1.2bn debt pile. The sharp drop in customers sparked a 7pc fall in revenues to £1.4bn, while this is forecast to fall further to between £1.25bn and £1.35bn in the coming year. James Ratzer, an analyst at New Street Research, said the darkening outlook 'makes the longer-term story considerably more challenging and further reduces the chance of corporate activity'. TalkTalk's financial troubles have fuelled speculation over dealmaking. The company split itself into three divisions in 2023 and has been seeking buyers for parts or all or part of the business. Bosses previously held discussions with Australian investment giant Macquarie about selling a stake in the group's wholesale division for up to £500m, but talks broke down and existing shareholders were forced to pump in their own money. TalkTalk suffered a further setback in October when Deloitte resigned as its auditor. In a rare public rebuke, the 'big four' firm said it had repeatedly told bosses that internal controls over financial reporting were 'not at the level we would expect for groups of the scale and complexity of TalkTalk'. Despite the cuts, TalkTalk has said it plans to relaunch its offering to customers. It also expects to make further cost savings in the coming year, including by moving its customer base away from copper networks to full-fibre.
