Cyber attack costs 101,000 customers to TalkTalk

Wednesday, February 3rd 2016

TalkTalk, the cost-conscious telecoms provider of UK, was hit by a cyber-attack last year which damaged the providers reputation. The damage has been reflected in the providers trading report as the on-net subscriber base has reduced by 101,000 subscribers and admittedly they suffered costs of £60 million as a result. However, the attack was as not as damaging as feared, as only 4% of the 4 million customers of the company were affected, and they did not suffer any financial loss despite of the exposure of details by hackers. The financial impact of the cyber attack was previously estimated by TalkTalk to be around 30 to 35 million pounds.

However, a long term threat still exists in the form of customer bleed or 'churn', as customers could leave as and when their contracts end in the following months. The churn was higher than anticipated at 2.1%, but the effect of the attack was attributed to be only 0.6%. The churn was to some extent offset by some customer gain. Volume growth in Fibre (FTTC) take-up was +54,000. Mobile saw a "modest growth" of +13,000, not including SIMs given free in the free upgrade offer.

Meanwhile a security review by the provider has resulted in arrests in connection with the cyber-attacks and breach. The company has been slowly improving security of their website, plus have offered many free incentives to existing subscribers to appease them, which was well received.


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