This article is more than 1 year old

TalkTalk wants more FOURPLAY, jumps into bed with Telefónica

'Bye Voda. What will Three think of all this Four?

Carphone Warehouse’s former pet telco TalkTalk has jumped ship from Vodafone to do an MVNO deal with Telefonica, signalling a move that will see it take on other quad-play telcos.

The model of selling the four services of TV, broadband, fixed and mobile phones all as part of a single package is much more developed in other parts of Europe but a rumoured move by TalkTalk is the latest indication that this is about to change.

TalkTalk already has a mobile offering through Vodafone and which is only available to people who already have another TalkTalk service. That has only been taken up by 350,000 subscribers which is 10 per cent of its customer base and a more aggressive quad-play should build both mobile and broadband customers.

The new deal is to include the full range of 3G and 4G services, while the Vodafone deal was only 3G, it also allows TalkTalk to target business customers. Having just announced the deal, TalkTalk is still selling Vodafone connections – it doesn't have any Telefonica SIMs yet and will work through the transition details over time.

A TalkTalk four-play package would take on offerings from Sky which is rumoured to be adding a mobile component to its packages and Vodafone, which is launching its own broadband offering. Currently the only aggressive four-play service is from Virgin.

The big rival, however, is BT which will be launching its consumer mobile MVNO in conjunction with EE shortly. BT is in a strong position as it has 4G spectrum of its own, although this poses interesting technical challenges.

Both TalkTalk and BT also have 1800MHz “guardband” spectrum. This was licensed for 2G and BT is using it for its Onephone business service, but TalkTalk has pulled off the cat-herding coup of getting it re-licensed by Ofcom for 4G and will, over time, use it as in-home 4G spectrum, however with only two lots of 3.3MHz of spectrum bandwidth won't be spectacular.

A spokesperson for TalkTalk said it was "unlikely" that TalkTalk would bid on the recently announced 3.5MHz auction.

The choice of Telefonica as a partner is interesting as it’s the least MVNO-friendly of the UK networks, preferring to partner Partitionware for MVNO deals. While the other UK networks have dozens of MVNOs, Telefonica generally has an ownership in the few deals it has done. It owns 50 per cent of its joint mobile venture with Tesco, while it has 100 per cent ownership in Giff-Gaff and - at least from 2006 to to 2010 - once owned Manx, too. While Lyca and Toggle are aimed at roamers, only GT Mobile sells in competition with Telefonica.

TalkTalk says that because it only sells its mobile service to people who have other TalkTalk services, it can offer better value for money. It's not aiming at high value customers with premium handsets, and that will slow down the 4G growth. Instead TalkTalk is looking to sell quad-play services to its base of older users and families with kids. In particular, it is offering free calling between TalkTalk customers on fixed and mobile.

The Fourplay market is getting interesting with BT, Sky, Virgin and now TalkTalk all at it. We'll have to see how Three responds. ®


Similar topics


Send us news

Other stories you might like