TalkTalk’s longer-term prospects look less certain after cyber hack

TalkTalk was a company born out of the need for diversification in a market operated largely by a monopoly. In late 2002, Sir Charles Dunstone’s Carphone Warehouse bought a small telecoms business to give it access to BT’s switching network.

That access meant that Carphone, through a new brand, could offer a landline service to customers.

A trial in Manchester in early 2003 was a success, and the company was soon promising it could deliver the service nationally, offering cheaper calls than BT. Within a year, broadband was on offer, and by April 2006, it was offering a combined high-speed broadband and landline package to cut bills by 60pc.

As a challenger brand in a market that had been dominated by an incumbent, TalkTalk rapidly grew its customer base. And, despite early problems with service levels and questions over customer service, by the time Carphone demerged the business in March 2010, it had more than 4m broadband customers.

Since then, the company has grown, under the leadership of Dido Harding, becoming more grown-up and a distinct entity in its own right.

Despite Sir Charles remaining non-executive chairman and being the largest single shareholder – with a stake of just under 31pc – under Harding’s stewardship it has become a constituent of the FTSE 250, and firmly positioned itself as a value brand, offering not just landlines and broadband but mobile phone and television services.

That was until last month, when everything changed for TalkTalk thanks allegedly to three young men from County Antrim; Feltham, west London; and Staffordshire, who hacked its firewall and stole customer information.

What matters to TalkTalk is how it has handled the attack, and whether it can recover.

Source: http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/telecoms/11989623/TalkTalks-longer-term-prospects-look-less-certain-after-cyber-hack.html

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