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Tuesday, January 16, 2007

TalkTalk broadband reaches 2.2 million

The Carphone Warehouse (TalkTalk) gave a third quarter trading update for the 13 weeks to 3oth December 2006 on the 12th January and with them, group revenue figures up by 31%.

This update shows the impact of the aquisition of the AOL's UK broadband business last year, with the groups overall number of broadband customers now at 2.12 million, of which 413,000 (132,000 TalkTalk broadband customers and 281,000 AOL broadband customers) are via an unbundled connection.

Charles Dunstone, Chief Executive Officer, said:

“We have had another very good Christmas period. Delivering profitable like-for-like growth after last year’s very strong performance is a great achievement, reflecting all our people’s efforts, and driving market share gains through the strength of our customer proposition.

“The completion of the AOL deal makes us the clear number three player in the UK broadband market with 2.2 million residential broadband customers, giving us the scale we need to deliver significant profitable growth in the medium term. Our immediate focus continues to be on improving our processes and customer service, where we have made good progress in recent months.

“In just its first nine months, Virgin Mobile France has established itself as the fastest growing virtual network in the market with 379,000 active customers, and customer acquisition is accelerating as the brand becomes more prominent and distribution becomes broader. In addition, Best Buy Mobile, our US joint venture, has enjoyed a promising start.

“Overall we anticipate a full year result in line with current market expectations.”

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Wednesday, October 11, 2006

Carphone Warehouse to acquire Time Warner's AOL Internet

Carphone Warehouse to acquire Time Warner's AOL Internet access business in the UK for £370 million. AOL to provide co-branded audience services and manage online advertising sales for combined customer base through a revenue-sharing agreement.

Carphone Warehouse and Time Warner Inc. (NYSE: TWX) have reached agreement for Carphone Warehouse to acquire AOL's Internet access business in the UK for a cash consideration of £370m ($688m) funded via an extension of existing debt facilities. Completion is subject to EU competition authority clearance and is expected to take place by 31 December 2006.

Under the agreement, Carphone Warehouse will acquire AOL's Internet access customer base in the UK as well as the supporting management and infrastructure (the "Access" business). For its part, AOL will provide co-branded portal, content and other audience services and will manage the online advertising sales for Carphone Warehouse's combined broadband customer base through a revenue-sharing agreement.

About AOL in the UK

AOL is one of the largest Internet service providers in the UK, with approximately 2.1m ISP customers. On completion, it is anticipated that this will comprise 1.5m broadband customers and 0.6m dial-up customers.

In the year to December 2005, the assets to be acquired generated revenues of £442.1m and an operating profit of £14.1m. Gross assets at December 2005 were £77.9m.

Rationale for the transaction

Since 2003, Carphone Warehouse has been building a significant presence in the UK residential telecoms market. Through organic growth and acquisition, it has grown to a base of 2.7m voice customers in under four years, giving it approximately 11% of the residential calls market. In April 2006, Carphone Warehouse launched a major new initiative, offering free broadband to its voice customers, and has attracted 625,000 applications for this service over the last six months.

The acquisition of the Access business will give Carphone Warehouse an enlarged broadband customer base of approximately 2m customers, making it the third largest broadband provider in the UK. Over time, the additional scale is likely to create significant operating efficiencies in relation to network infrastructure and marketing costs.

In addition, the commercial agreement in relation to the Audience business provides Carphone Warehouse with a ready-made platform via which it can generate material incremental value from its large and growing customer base. The management time and investment cost involved in replicating the Audience business model would be significant, so the structure of the deal allows Carphone Warehouse to accelerate its plans without the requirement to build further internal resource.

For Time Warner and AOL, this transaction marks an important step in positioning AOL's audience business to take further advantage of the rapid growth in online advertising - in keeping with AOL's overall worldwide strategy. In addition to exiting its Internet access businesses in Germany, France and the UK, AOL will now have a stronger platform for providing portal, content and other audience services, on a stand-alone as well as a co-branded basis, and managing online advertising sales.

Financial impact

The total cash consideration is £370m, of which £250m will be paid on completion and the balance paid in three instalments over the following 18 months. The consideration is being funded by an extension of existing bank facilities.

The transaction is due to complete by 31 December 2006 and is subject to EU competition authority clearance. At this stage it is anticipated that the acquisition will increase current year pre-tax profits by approximately £10m (subject to completion by 31 December 2006), and next year's pre-tax profits by £30-40m.

Commenting on the acquisition, Charles Dunstone, CEO of Carphone Warehouse, said:

"The acquisition of AOL's UK Internet access business is transformational for our broadband business. This deal gives us significant scale to complement the rapid organic growth of our free broadband proposition. In addition, the joint development of AOL's already successful audience platform will bring us new advertising and content revenues in a proven and low risk manner."

Dick Parsons, Chairman and CEO of Time Warner, said:

"This agreement completes the restructuring of our AOL Europe businesses that both advances AOL's strategic transition to an advertising-supported business model and underscores Time Warner's commitment to shaping its portfolio of assets to drive the greatest growth possible. On both fronts - as well as across our company - we're successfully building critical momentum to the benefit of our shareholders. As a leading provider of audience services in Europe, AOL will be better positioned than ever to continue to grow a cohesive online advertising business across a region that's key to our future progress."

Jon Miller, Chairman and CEO of AOL LLC, said:

"For a decade, AOL has played an important part in the growth of the online medium in the UK. Under the partnership announced today, AOL will expand the size of its audience in the UK as a Web-services business. This is an ideal outcome for AOL, for Time Warner, and the customers we serve."

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Monday, May 15, 2006

TalkTalk number one for customer satisfaction

Today the latest report on customer satisfaction among home phone users, commissioned by the independent comparison and switching service uSwitch.com, reveals that telecoms giants ntl and BT are still trailing their younger competitors in every area of customer service that was reviewed. In fact, in each of the main categories in the report, either ntl or BT came last – with ntl finishing bottom in 5 of the 8 categories and BT falling behind in 2, both companies were voted as the least likely to ensure that existing customers are on the best deals for them.

TalkTalk, meanwhile, came out on top in every category apart from one – maintaining an impressive 17% gap between the level of satisfaction among its customers (89%) and those of last placed ntl (72%).

The uSwitch.com customer satisfaction report – one of the largest in the UK - monitors the quality of service provided by the biggest home phone providers, as evaluated by their own customers. Launched in November 2005, with the aim of providing consumers with the necessary information to make an informed decision about their existing or future supplier based on service as well price, more than 16,000 home phone users have now taken part. The survey, one of the most comprehensive in the industry, provides a unique insight into customer experience. The full results can be viewed on the uSwitch.com website, where consumers can take advantage of the unique facility to compare levels of customer satisfaction alongside information on cost and potential savings. uSwitch is also the only price comparison service in the UK to have an Ofcom-accredited home telephony calculator.


  • Overall, TalkTalk has the most satisfied customers (89%), followed by Tiscali (88%), Sky Talk (87%) and Telewest (83%), BT (75%) and ntl (72%) had the lowest scores.
  • Almost 730,000 (28%) ntl customers, and 3.25 million (25%) BT customers are not satisfied with their provider.
  • Value for money is the most important factor for consumers when they are asked about their home phone service, with 99% of respondents saying that it is important to them. However, while almost 9 out of 10 TalkTalk customers (88%) feel that they are getting value for money, only 59% of BT customers do – 5.3 million remain dissatisfied.
  • Telewest comes out head and shoulders above the rest for customer support services, with three quarters (75%) of its customers saying that they are happy with their provider – 12% more than their nearest rival in this category.
  • Almost half (48%) of Tiscali customers and one in two (50%) ntl customers are not satisfied with their provider’s customer support services.

Consumer trust in suppliers to look after their interests is low across the board – with only 48% on average believing that their provider makes sure that they are on the best deal. This means that almost 12 million customers are not sure whether they do have the right package. The majority of ntl (56%) and BT (56%) customers do not believe that their supplier ensures they are on the best possible deal and this is also true for nearly half of Tiscali (43%) and Telewest (46%) customers. Even the highest ranked provider TalkTalk only achieves a 65% satisfaction rating in this category.

Chris Williams, Home Phone Product Manager at independent comparison and switching service uSwitch.com said: “The probability that consumers will come into contact with customer services is going to increase significantly as developments in the industry increase the likelihood of more and more people signing up for ‘bundles’ with a single provider – taking not just their phone service, but also a broadband connection and possibly a television service. The quality of their experience is likely to have a significant impact on whether they decide to stay with a particular provider, or switch to a company with a better track record.

“Our latest report reveals that some home phone providers – most notably ntl and BT - still appear to be falling short of delivering the service levels that their customers expect. Once again, TalkTalk has come out on top in seven of the eight main categories, including the category for best Overall Customer Satisfaction. It will now be interesting to see whether they can maintain these levels of satisfaction among their customers as they expand other areas of the business.”

Almost everybody surveyed stated that ‘value for money’ was an important factor when they were choosing a supplier– demonstrating that consumers now have a clear idea of the service they expect to receive from their provider. In spite of this, it would appear that over 8 million households are not satisfied with the value for money they receive from their current provider.

Williams concludes: “There appear to be more than 7 million customers who are likely to review their existing deal within the next 12 months. Consumers have always known that they can shop around for better prices, but this report shows that suppliers can also be differentiated by other services such as customer support and value for money. By comparing their existing deal with what is available throughout the rest of the market, customers can have the best of both worlds and ensure that they are getting a good deal on both cost and service.”

Talk Talk broadband

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Sunday, April 30, 2006

Free broadband forever from the Carphone Warehouse

TalkTalk, the telecommunications company from The Carphone Warehouse, today launches free broadband forever, saving people up to £400 a year.

"For too long the British public has been charged costly fees for high-speed internet access, or has had to use slow internet connections. We are bringing this to an end," said Chief Executive, Charles Dunstone.

"High speed internet will now become a standard service in the home - just like radio or television. The change this represents for society is huge. This is the tipping point."

From today, free broadband is available to anyone who signs up to the company's Talk 3 International calls package, which is already the best value on the market and guaranteed to be cheaper than BT. For £9.99 per month, plus the usual £11 line rental cost, customers will get:

  • Unlimited local and national calls to any landline in the UK
  • Unlimited international landline calls to 28 countries (the EU, Australia, New Zealand, Canada and the USA)
  • Plus up to 8Mb broadband FREE, giving customers easy access to services including movies, music and radio stations.

Customers will then just need to pay a one-off connection charge of £29.99.

"First we launched free calls for our customers, today we're launching free broadband forever. Our focus will now be on processing all orders as quickly as possible. Demand is going to be enormous," said Dunstone.

Further information: http://talktalk.broadband-123.co.uk

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