• Launching Free TV for Plus customers, the UK’s best value triple play
  • Free set top box, No additional monthly cost, Flexible premium content
  • Value accretive during lifetime of contract, with material value creation thereafter
  • Reiterating all FY13 and medium term financial guidance given in May

Creating shareholder value with an extraordinary TV proposition

  • Available to all TalkTalk Plus customers with pre-registration from today
  • For no additional monthly cost*, Plus customers will receive a free set top box, access to all YouView content, the TalkTalk Player, 12 months free subscription to LOVEFiLM Instant, unlimited calls and unlimited data downloads
  • Incremental cost of acquiring new triple play customers of £140 will deliver positive EBITDA over lifetime of contract. Thereafter, we expect TV to reduce churn materially, expand our broadband market share, grow ARPU, and drive incremental value
  • Commercial agreement with BSkyB to offer all Sky Sports channels (including Live Formula 1TM), Sky Movies and Sky basic channels on a flexible, monthly basis
  • Access to a TV product for the vast majority of our customers over time and a natural upgrade path for the 7.5m Freeview customers

*Requires a new contract - 24 months for existing Plus customers,18 months for new Plus customers including upsold

Q1 – an encouraging start to the year

  • 10% growth year on year in fully unbundled customers
  • Continued strong take-up of Plus (+66,000 in Q1)
  • Positive net adds in June; -19,000 in Q1 overall, reflecting soft gross adds environment and longer lead times on connections
  • Total revenue £414m, on-net revenue £285m (+9.0% year on year)

Dido Harding, Chief Executive of TalkTalk commented:

“It has been an encouraging start to the year. We continue to improve customer service and this has been reflected in a further reduction in complaints and churn. We returned to customer growth in June, despite longer lead times on connections, and our base of fully unbundled customers grew by 10% year on year in the quarter.

This is a great base from which to launch our groundbreaking, free, TV service. TalkTalk Plus customers will, from today, be able to pre-register for their free YouView set top box with no additional monthly subscription. This compelling offer is the UK’s best value triple play package. It will give our customers more reasons to stay with us for longer and attract new broadband customers. It will also deliver significant value for shareholders. This is TalkTalk at its disruptive best.”

Q1 operating metrics

  Q1 FY13 Q1 FY12     Q1 FY13 Q1 FY12
Total Base 4.047m 4.172m   On-Net revenue £285m £261m
Fully Unbundled 3.096m 2.827m   On-Net ARPU £25.27 £24.00
Plus 1.092m 0.667m   Corporate Revenue £80m £77m

Analyst and investor presentation: 20 Broadwick St, W1F 8HT at 9.30am
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