TalkTalk loses 95k customers in wake of cyber attack

TalkTalk revealed the extent of its cyber-attack injuries on Tuesday, showing a serious drop in customer numbers in its third quarter trading update.

The FTSE 250 telecoms provider did report revenue growth of 1.8%, though it lost 101,000 customers in the three months to 31 December 2015.

TalkTalk suffered a serious cyber attack early in the period, which saw the companysuspend sales to new customers for a short time and see significant damage to its brand value.

The company's board said the cyber attack had a trading impact of £15m, and created exceptional costs of £40m-£45m.

TalkTalk's on-net customer churn during the three months was 2.1%, of which 0.6% was estimated to be the impact of the attack. Of the 101,000 customers lost, TalkTalk estimated 95,000 of them were due to the attack.

"It is encouraging to see the business returning to normal after a challenging quarter that was dominated by the cyber attack", said TalkTalk CEO Dido Harding.

Harding said customers responded well to the company's efforts to retain them, with almost half a million choosing to take up the unconditional offer of a free upgrade.

"Both churn and new connections recovered furing December and January, and independent external research has revealed that customers believe we acted in their best interest", she added.

Post period end, TalkTalk's board said the business was returning to normal, with its free upgrade offer - created as a sweetener for the market after the cyber attack - more successful than expected.

The company's EBITDA guidance for FY16 was £255-£265m, with anticipated dividend growth of 15%. In FY17, the board was looking at EBITDA of £320m-£360m, with a dividend no lower than in 2016.