TalkTalk halts the exodus of customers

TalkTalk Telecom has been haemorrhaging customers for a year, in a period in which it was hit with a £3m fine for shoddy service from watchdog Ofcom and was forced to pay out £2.5m to customers who were billed despite cancelling their packages.

But the company, which has four million customers, said the rate of decline in customers has appeared to stabilise – and it now expects total broadband users to rebound to growth before the summer.

The group said the performance was down to an overhaul of its heavily-criticised customer service, which involved improving its website and less reliance on call centres.

The company, which has seen customers leave as a result of disruption after it bought Tiscali’s UK business, said total net customers declined 43,000 in the third quarter of its financial year, which was the same as the decline in the previous quarter.

Ofcom took action against TalkTalk and its Tiscali UK subsidiary last year following the receipt of more than 1,000 complaints relating to incorrect bills.

It ordered TalkTalk to provide refunds to all consumers who had been billed for cancelled services since January 1 2010, cancel debt collection action and take steps to repair the credit ratings of affected customers.

The group early last year announced that it would axe around 580 jobs, mainly in administration functions, such as human resources, IT and finance.

The job losses, across London, Warrington, Irlam in south Manchester, and Preston, accounted for almost 13 per cent of TalkTalk’s UK workforce, bringing it to under 4,000.

The cost savings meant TalkTalk yesterday lifted its expectations for full-year earnings, with profit margins now expected to be around 18 per cent to 19 per cent, compared with previous estimates of 17 per cent to 18 per cent.

Group revenues were flat quarter on quarter at £422m, TalkTalk added.