TalkTalk facing customer exodus?

 

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By Stuart Turton

Posted on 27 Sep 2007 at 12:21

TalkTalk could be facing a mass exodus as hundreds of thousands of "free" broadband customers are about to see their contracts expire.

Eighteen months ago TalkTalk launched its free broadband offer and was promptly inundated with customers. However, the company struggled to cope with early demand and has since been saddled with a reputation for poor customer service, despite a £15 million investment.

That initial batch of customers will be released from their 18-month contracts on 11 October and TalkTalk will soon see whether its improvements are enough to keep hold of customers in the face of mounting competition from companies such as Sky, Virgin and Orange.

"Its main competitor is Sky," Michael Philips of BroadbandChoices.co.uk tells PC Pro. "For price, nobody has touched TalkTalk on phone and broadband packages, but what Sky has done is offer TV and free broadband which is potentially more compelling to people."

"Price was obviously the major attraction for TalkTalk customers, but those same customers now have the choice of free broadband from Orange and Sky, free line rental at some Tiscali exchanges, and even free digital TV from BT or Virgin Media."

"Charles Dunstone [TalkTalk CEO] was pleased with the [free broadband] offer for about 24 hours before realising he'd opened a Pandora's box. Since then though, it's improved customer service, improved what it offers and it still has one of the cheapest packages around."

TalkTalk says it's not expecting mass migration from its service. "We are confident that customers that have enjoyed free broadband will continue to do so. This is borne out by our own research and independent research by Point Topic that shows that the majority of TalkTalk customers are happy with their service and happy to remain with TalkTalk," says the company in a statement, though it refuses to comment on whether it would be offering customers an incentive to stay.