November 13, 2012 / 12:30 PM / in 5 years

UPDATE 1-TalkTalk sees return to revenue growth after TV launch

* H1 revenue 828 mln stg, down 2 pct

* H1 core earnings up 6.2 pct to 155 mln stg

* Adds more profitable unbundled customers

* Shares up 11.6 pct

By Paul Sandle

LONDON, Nov 13 (Reuters) - Telecoms operator TalkTalk said it expected to reverse a decline in revenue growth in this financial year as it expands its product range and adds more broadband customers on its own network.

The company, which launched a YouView digital television service in September, said first-half revenue slipped 2 percent to 828 million pounds ($1.3 billion) and its broadband customer base fell slightly in the second quarter to 4 million.

However, it added 66,000 more profitable fully unbundled customers, giving it what Chief Executive Dido Harding said was the company’s best trading quarter for two years.

The company, which competes with BT, Virgin and BSkyB, added mobile handsets to its line up in the summer, which along with its on-demand television product, gave it a “quad play” offer for the first time.

“We’ve made an encouraging start to both our mobile handsets business and TV,” Harding told reporters on Tuesday.

“TalkTalk customers are increasingly willing to take more services from us.”

Shares in the group rose to the highest level since it demerged from Carphone Warehouse in March 2010. They were trading 11.6 percent higher at 208 pence, the biggest mid-cap riser, by 1216 GMT.

Analysts at Citi said the results were better than expected, with the 1.7 percent year-on-year drop in second-quarter revenue an improvement on the 2.1 percent drop in the first quarter.

Second-quarter average revenue per user from customers on its own network rose to 25.37 pounds from 23.99 pounds a year ago.

Underlying core earnings for its first half rose 6.2 percent to 155 million pounds.

The company, which sponsors ITV’s “X-Factor” show, said it was adding new TV customers at the rate of 1,000 a day, while it was also seeing strong demand for its mobile offer.

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