• TalkTalk Business has continued to deliver impressive growth up 10.6% in H1 2016

• TalkTalk Business is a profitable and fast growing part of TalkTalk Group, accounting for 30% of total Group revenues

• Business demand for data services continues to soar as TalkTalk Business reports over 4,200 net Ethernet lines connected

TalkTalk Telecom Group PLC’s preliminary financial results for the 6 months to 30 September 2016 have today revealed strong growth for TalkTalk Business. Overall, revenues for TalkTalk Business account for 30% of the Group and have grown by 10.6% year on year. TalkTalk Business is a significant, profitable and fast growing part of the business, and the division has ambitions is to double its size over the medium term, driven by continuing growth in data products, next generation voice services and broadband customer base growth delivered via its direct and partner (wholesale) channels.

Corporate revenue growth within H1 2016 was driven by continuing strength in data (+38.9% year-on-year) driven by a net increase of 4,2000 Ethernet and EFM connections year on year, and offset by the expected reduction in Legacy Voice revenues in line with market trends. Business demand for high speed data is growing fast due to TalkTalk Business’ commitment to providing high speed connectivity at good value for money. TalkTalk Business is beginning to see strong take-up of TalkTalk’s new next generation voice product, with revenue growth during the half of 35%. Carrier revenues also grew strongly year on year (+30.9%).

Significant contract wins for TalkTalk Business during the period include Marston’s Telecom, which includes upgrading 500 premium sites to full Ethernet services under a three year contract and Global 4, which will see the business installing EoFTTC and DSL across 900 client sites.

Charles Bligh, Managing Director TalkTalk Business, Technology and Security, comments: “TalkTalk Business customers expect an easy to deal with partner that can deliver brilliant service across all our offerings. The past six months have been strong, with data revenues up 38.9%. We are continuing to deliver next generation voice services such as SIP, strengthening our next generation network and building on the success of MyNet with our partners.”

A summary of TalkTalk Business’ results can be found below. For a detailed Group financial and business review, as well as insights into specific product areas such as Broadband, Mobile, Fibre, TV, Network, please visit here.

Media Enquiries

Gary O’Sullivan / Andrew Rogers, Diffusion

talktalkbusiness@diffusionpr.com

020 7291 0235

Editor’s Notes

TalkTalk Business is one of the fastest growing B2B telecoms providers in the UK, serving the needs of over 180,000 businesses and public sector customers, as well as small businesses, partners, systems integrators and carriers around the country. TalkTalk Business is also one of only two national wholesalers of broadband and fibre to the cabinet.

Continuing strong growth at TalkTalk Business: Corporate (+10.6%) and Data (+38.9%)

TalkTalk Business (TTB) has delivered another six months of strong performance in Corporate.  Revenues for the half grew by 10.6% to £208m (H116: £188m), and by 2.3% excluding Carrier.  Data revenues grew 38.9% year-on-year with the number of Ethernet and EFM lines up by 4,200 in the half.  Legacy voice revenues declined (-22.8%) in line with the established trend but we are beginning to see strong take-up of our new next generation voice product, with revenue growth during the half of 35%.  While Carrier revenues at £72m were up strongly year-on-year (30.9%), we expect the rate of growth to level off materially in H2, returning to more normalised patterns of trading.

Major contract wins and strengthening pipeline

Significant contract wins in Data during the period include Marston’s Telecom, for whom we will be upgrading 500 premium sites to full Ethernet services under a three year contract and Global 4, for whom we will be installing EoFTTC and DSL across 900 client sites.

We are seeing increasing quality in the future pipeline from small businesses looking to use our high speed Ethernet products as they transition to hosted voice products.  We are also growing the pipeline with large corporates looking to take advantage of our new managed network offering.  Notably we have seen demand growing both pre and post Brexit, reflecting the strength of our partner channel, and our clear value proposition focused on value, reliability, simplicity and innovation.

Expanding product portfolio to serve growing demand

We have continued to expand our portfolio of data products.  In Q2, we completed our plans to offer a complete portfolio of FTTC and Ethernet products, for which there is strong demand from both our partners and direct customers. The number of partners wholesaling FTTC from us has grown in the last 6 months and we expect continued growth in this area.

Following our acquisition of tIPicall in April 2015, our next generation voice portfolio continues to gain good momentum. 94 Partners have signed to sell this new service and the total base of SIP channels on the platform, including acquired base, has increased by 47% in H1.  The acquisition has continued our diversification into next generation telephony services, further demonstrated by our hosted telephony platform which has seen a user base increase of 22% in H1.