TalkTalk to swallow £35m ‘financial impact’ after attack

It looks like customers will stick around after blip, says telco

Budget ISP TalkTalk confirmed this morning that it would be hit with a bill of up to £35m following the attack on its systems last month.

The security breach affected fewer customers than previously feared, TalkTalk’s chief Dido Harding claimed. It had initially warned that its entire four-million-strong subscriber base could be affected by the raid on its website.

This morning, it reported the firm’s first half results to the City, including a pre-tax loss of £8m.

Total revenue for the six-month period ended 30 September climbed 4.7 per cent to £912m, TalkTalk said that 80,000 on-net broadband customers vanished in the first half of its fiscal. It attributed the loss of 72,000 disconnections to non-paying customers after it changed its credit terms.

The company said it would offer free upgrades to all its customers. But it will not allow anyone who is nervous about their data being stored by TalkTalk following the attack to end their contract free of charge.

It expects to lose more subscribers as a result of the attack but said “retention activity” (in other words, holding on to customers) looked “encouraging”.

The telco said:

This adjustment reduces our opening on-net position from 4.18 million customers on 1 April 2015 to 4.11 million, comprising 3.37 million retail customers (residential consumers and small businesses) and 0.73 million wholesale customers.

“However, TalkTalk takes the security of customers’ data extremely seriously and we are taking significant further steps to ensure our systems are protected, as well as writing to all our customers outlining what we are doing to keep their data safe,” said Harding.

TalkTalk numbers came just before the security breach on its systems occurred. At present, the ISP said it remained “on track to deliver FY16 in line with current market expectations pre-cyber attack impact.”

The firm added that it needed “to build simplified, resilient processes” and said that it “may need to reprioritise some of our technology work streams over the coming months”. ®