UPDATE 1-TalkTalk attracts 185,000 new customers to its family TV offer

Wed Jul 23, 2014 5:45am EDT

(Adds CEO comments, analyst reaction, shares)

By Paul Sandle

LONDON, July 23 (Reuters) - British broadband provider TalkTalk added 185,000 subscribers to its TV service in its first quarter, taking its base to more than 1.1 million and helping revenue rise 3.1 percent to 434 million pounds ($741 million).

The company, which serves the value segment of the market, is selling more services such as TV and mobile to the 4.1 million broadband customers on its network to boost revenue.

Chief Executive Dido Harding said the strategy had delivered a sixth consecutive quarter of revenue growth and, although net broadband adds rose by a relatively modest 10,000, it was the seventh consecutive quarter of growth on that measure as well.

Its bigger rivals BT and BSkyB, both of which are using premium sports programming to boost broadband subscribers, are expected to report net additions of 100,000 and 90,000 respectively when they post numbers over the next eight days, analysts at Jefferies said.

"We expect to grow the business modestly in terms of total broadband customers but exponentially fast in terms of people taking more services," Harding said in an interview.

Its TV offer is aimed at customers upgrading from free-to-air digital TV, and its customers typically dipped a toe in the pay-TV market by buying a film or a children's entertainment package.

"I can't claim with absolute certainty that we are adding more TV customers than all of our competition put together but I am pretty sure that we are," she said.

The most popular move purchased by TalkTalk customers in the quarter was Walt Disney's "Frozen", Harding said, while "The Lego Movie" was most likely to take the top spot in the summer holidays in its family households.

Analysts at Barclays, who have an "overweight" rating on the stock, said it was "another quarter of steady growth". Revenue came in 2 million pounds below its forecast.

Shares in TalkTalk were trading down 0.8 percent at 750 pence at 0910 GMT.

($1 = 0.5859 British Pounds) (Editing by Neil Maidment and Gareth Jones)