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Security failings contribute to dramatic TalkTalk share decline

Digital Networks IoT Broadband Internet

Market researcher Kantar Worldpanel has released its numbers for the 2015 UK home communications services market and they make ugly reading for broadband provider TalkTalk.

Kantar bundles together broadband, fixed landline and paid television market shares into one, to track the leading domestic comms players and the latest numbers reveal TalkTalk managed to halve its share of new business in just six months in 2015, dropping from 18% to 9%. Some of the blame for this can be attributed to the October security breach, but the decline was already well underway before then.

“Customers have lost faith in TalkTalk as a trustworthy brand,” said Imran Choudhary of Kantar.  The provider saw its share of the home services market fall by 4.4 percentage points quarter on quarter in terms of new customers [in Q4], only 1.4% of whom gave reliability as a reason for joining the provider in the last three months – well below the market average.

“TalkTalk continues to offer some of the most attractive promotions across the home services market and almost a third of its new customers did choose it for this reason, but there can be no doubt that it lost potential customers following the major data hack.  If it’s to recover from recent events TalkTalk will need to offer more than just good value.”

The main beneficiary of all this new business giving TalkTalk the cold shoulder was BT, which had overtaken Sky at the number one destination for defecting comms punters by the end of the year. It’s no coincidence that BT has been ramping up its investment in unique content, especially football and that seems to be paying dividends. And while Kantar doesn’t bundle mobile share into this index it wouldn’t be at all surprising to see BT’s share continue to climb after it finishes acquiring EE.

“BT continued to perform well in the final quarter of 2015, driven by further strong performances in TV and broadband,” said Choudhary. “The provider reached a share of 30% for the broadband market moving further ahead of Sky, its nearest competitor. It also continued to reap the rewards of its successful sports proposition. In contrast to TalkTalk, BT felt the benefits of an improved perception of reliability, with 12% of new customers saying their primary reason for joining was because they saw it as a trusted supplier – twice the market average.”

 

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30 June 15

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30 September 15

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31 December 15

Share change Q3 to Q4, ppt
BT 22.4 26.2 28.6 2.4
Talk Talk 18.1 13.4 9.0 -4.4
Virgin Media 8.9 10.7 11.1 0.4
Sky 27 30.2 28.3 -1.9
Other 23.6 19.5 23.0 3.5

Volume share of UK home services new business – source: Kantar Worldpanel


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