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TalkTalk wants to exit the mobile business
According to the FT, it doesn't want to be a 'quad-play' provider anymore.
TalkTalk wants to ditch its mobile business and focus on cheap home broadband, according to the Financial Times. The company has long been a 'quad-play' provider, offering TV, mobile, landline and broadband bundles in the UK. You can buy each service individually or combine them to save money, much like Sky, BT and Virgin Media. It's a simple proposition: TalkTalk's bundles are normally cheaper, but in return you have to put up with a slightly inferior service. Now, however, it's looking to give up on mobile altogether, which can only be interpreted as a tactical retreat.
TalkTalk launched its first mobile plans in 2010 by piggy-backing on Vodafone's UK network. The company is still a 'mobile virtual network operator,' though it's since switched to O2's infrastructure (its deal with Vodafone meant it couldn't offer 4G). As the Financial Times reports, TalkTalk had considered creating its own mobile network that could be utilised in conjunction with O2's cables. It eventually scrapped the project, however, preferring to "work closely with [O2 owner] Telefonica UK on the right platform and customer offering." The company has 913,000 mobile subscribers at the moment, some of which are on quad-play bundles.
According to the Financial Times, TalkTalk is trying to strike a deal that would involve selling a rival's SIM cards alongside its broadband packages. If the company sidled up with O2, for instance, you would receive a discount for taking out an O2 smartphone plan with one of TalkTalk's home internet offerings. "We are in advanced discussions with a number of potential partners, including O2, to agree a low touch, retail arrangement that will enable us to continue to offer a compelling mobile service to all our broadband customers," a spokesperson for TalkTalk told the FT.
The large and embarrassing TalkTalk hack of 2015 still looms over the company. Management tried to shake its fragile image with a simpler, "all-in" pricing structure and a family-focused marketing campaign last October. It doesn't seem to have worked, however. TalkTalk is up against mounting competition in the mobile space too. EE continues to work on its TV offering, while Three, Virgin Media and Vodafone experiment with "free," zero-rated data deals. Throw in the various MVNOs such as Tesco Mobile, Giffgaff and iD, and suddenly TalkTalk has a hard time standing out. Bowing out, while not ideal, might be its best bet financially.
