TalkTalk warns over profits as it reveals broadband roll-out plan
SHARES IN TalkTalk have tanked after the telecoms group warned over profits while unveiling plans to roll out full fibre broadband to three million homes and businesses through a joint venture with Infracapital.
The firm slashed its annual earnings outlook to between £230m and £245m from £270m to £300m, sending shares sliding more than 14 per cent during trading.
TalkTalk said £1.5bn would be invested in the new broadband company, helping to ramp up competition and shift Britain’s digital infrastructure in line with other major European nations.
Infracapital, an infrastructure investment arm of M&G Prudential, will take an 80 per cent slice of the new firm and make an initial £400m investment, with TalkTalk owning 20 per cent and stumping up £100m.
The move comes as TalkTalk tapped investors for £200m to shore up its balance sheet, help drive customer growth and underpin its fibre investment plans.
The firm also gave a performance update; it said customer numbers rose by 37,000 in the third quarter, compared with 26,000 in the quarter before.
Churn levels – the rate of customers moving to another provider – dropped to 1.3 per cent over the three-month period in contrast to 1.6 per cent in 2017.
Chief executive Tristia Harrison said the outlook was “positive” and the business was on track for 15 per cent earnings growth.
Digital Minister Matt Hancock said: “We strongly welcome this commitment by TalkTalk to take full fibre broadband to three million homes and businesses in the UK. This investment will make significant strides in giving Britain the connectivity we need to be fit for the future.”