TalkTalk lost 101,000 customers and suffered costs of £60m as a result of a cyber-attack on the company in October, but said business was returning to normal. The telecoms company said the net loss of customers in the three months to the end of December reflected fewer connections and greater “churn” as customers chose to leave. But revenue increased 1.8% in the period, the third quarter of TalkTalk’s financial year.
TalkTalk’s computer systems were hacked in October in what was originally feared to be a mass raid on customers’ personal data. The attack proved to be less successful than first believed, with about 4% of the company’s 4 million customers affected and no financial loss incurred by customers despite the partial disclosure of payment details.
But customers were left fuming by the company’s handling of the attack in its early stages and its seemingly slack security systems. TalkTalk refused to let people terminate contracts without incurring charges, and instead offered them a free upgrade, which almost half a million customers took up.
TalkTalk gained fewer customers than expected following the attack because it closed down online sales operations, and the cost of the disruption in the third quarter was about £15m, it said in a trading statement. There were also exceptional costs of £40m-£45m, taking the total bill for the attack to £60m.
Dido Harding, TalkTalk’s chief executive, said: “It is encouraging to see the business returning to normal after a challenging quarter that was dominated by the cyberattack. Both churn and new connections recovered during December and January and independent external research have revealed that customers believe that we acted in their best interests.”
The company said earnings before interest, tax and other items for the year ending in March would be £255-£265m and that the dividend would increase by 15%. Before the trading update, analysts’ average forecast was for earnings of £264m.
