LONDON (Reuters) - British broadband provider TalkTalk (TALK.L) added 118,000 new customers to its fiber product in the three months to end June, helping it to reiterate its full-year earnings target.
TalkTalk, which competes with BT (BT.L), Sky (CMCSA.O) and Virgin Media (LBTYA.O), said 70% of new consumer customers took fiber in the first quarter, driven by rising demand for video content on Netflix, Amazon and YouTube.
That helped to also lift the average revenue TalkTalk gets from each user to 24.72 pounds ($30.67) from 24.65 pounds in the same quarter last year.
Total headline revenue grew 1.3% to 387 million pounds.
“This is all around the acceleration of fiber for customers, driven by increases in data, and principally that’s due to over the top video streaming,” Chief Executive Tristia Harrison told Reuters.
“A fiber customer is a more profitable customer for us,” she said.
TalkTalk said its full-year 2020 guidance of strong EBITDA (core earnings) growth remains unchanged, underpinned by accelerated fiber penetration and its cost reduction plans.
TalkTalk is building its own fiber-to-the-premise network in the northern city of York and three additional towns, but it has a more ambitious plan to build a network serving 3 million premises with an investment partner.
Harrison said the firm was making good progress in finding a partner with advisor Lazards.
“We’re working with and talking to a whole range of the large infrastructure investors,” she said.
Shares in TalkTalk, down 7% so far this year, closed Tuesday at 105.7 pence, valuing the business at 1.22 billion pounds. They were trading up almost 1 percent after the market opened on Wednesday.
Reporting by James Davey, editing by Kate Holton