TalkTalk still impacted one year on

The latest figures from Kantar Worldpanel ComTech on the home services market – covering broadband, fixed landline and paid television – reveals a slowing decline for TalkTalk following its cyber security failings a year ago, despite a loss of 14% of its customers over the year.

Ossian Robertson, consumer insight director at Kantar Worldpanel, comments: “One year on from the hacking scandal there are signs that TalkTalk’s performance is stabilising, though it remains in a much weaker position. Its share decline has slowed, and is now only 0.4 percentage points lower than last quarter, but this level should still concern TalkTalk. Its current customers feel that they are less well-rewarded for their loyalty than those of other providers and TalkTalk will need to work hard to ensure its remaining user base stays put.

“In theory TalkTalk’s new 18-month fixed price tariffs and offers of identical deals for both existing and new customers should help it stem the flow of people leaving the provider – with 14% of its customers switching since the hacks it has a lot of work to do in restoring its reputation. Unfortunately for TalkTalk, news of its £400,000 fine for security failings has dampened the impact of the announcements and may cause further setbacks in clawing back share.”

Despite the impact of the cyber attack TalkTalk was not the worst performer this quarter, with Sky’s share of new acquisitions falling by 5.1 percentage points compared to TalkTalk’s 4.0 percentage point decline. Sky customers’ overall levels of satisfaction with their package is currently lower than that of Virgin and Plusnet, and it will be hoping to improve this by offering a wider range of services than its competitors.

Ossian Robertson, consumer insight director at Kantar Worldpanel, comments: “Increasingly, customers are looking for packages that can give multiple users simultaneous digital access throughout the home – allowing a gamer in one room to stream content at the same time a movie-lover watches a film in another. Sky is investing heavily in offering packages facilitate this, including its recent launch of Sky VR, its expansion into eSports and heavily pushing the ‘fluid viewing’ capabilities of Sky Q.

Despite a drop-off in new customer acquisitions in broadband and landline – with a third of those leaving its broadband service moving to BT – Sky has made strong gains in paid television this quarter. This has been helped by the wider rollout of Sky Q boxes and the launch of Sky Cinema. In a competitive home services market where BT is upgrading its sport offering and Virgin has enhanced its broadband, Sky is showing its customers that it is upgrading in kind to keep its package attractive.

At Virgin, performance has slowed slightly after several quarters of growing its share. For the past six months Virgin has been second only to Plusnet in perception of value, but recent price increases appear to have impacted this and it now sits equal to Sky, traditionally seen as a more premium provider. However Virgin has a clear strategy of showing customers how it will use these higher prices to invest in and improve its service, with new superfast products like its Vivid tariff which is aimed at gamers.

Ossian Robertson, consumer insight director at Kantar Worldpanel, explains: “More than three million people bought digital games through their PCs or consoles in the past year, with a similar number watching gaming content through services like Twitch and YouTube, so this is a sizeable and valuable target audience. Virgin has always shouted about its fast speeds so this is a logical extension to its message – with almost a third of those moving to Virgin doing so because of its connection speeds its performing significantly above the market average of 10%.”

All the major providers have seen their share of acquisitions in the fixed broadband market decline as they face increased competition from Plusnet and other smaller providers, as Vodafone also starts to gain traction in the market. BT was the only provider to win share in the overall home services market this quarter thanks to a strong performance in paid television, with a further advertising push on its football content over the summer almost matching it to Sky in television share.

Ossian Robertson, consumer insight director at Kantar Worldpanel, comments: “BT’s most expensive package is cheaper than Sky’s basic package which it’s been majoring on in its advertising. Customers choosing BT have mainly moved from Freeview and Sky, so they’ve pitched their pricing well to secure this appeal.”