TalkTalk has entered into a new multi-year commercial MVNO agreement with Telefónica UK. In providing access to the latter’s 2G, 3G and 4G services, it should allow the telco to rapidly grow its recently launched quad-play business.
TalkTalk refers to the development as a “significant commercial relationship” that will help it build on its success to date in mobile.
As of the end of Q3, 350,000, or 9.5% of its total customer base, already took mobile services from the company.
Now, it will be able to offer a high quality mobile proposition to all its customers and advance its plans to “build a scale and profitable quad-play business over the medium term”.
Furthermore, it is a “major step” in TalkTalk’s long-term strategy to build a small cell and FTTH network.
Speaking in a conference call, Dido Harding, TalkTalk’s CEO, refused to provide details about the economic model in the new relationship with Telefónica UK, adding that how the deal works is commercial sensitive.
However, she did say that she believed to be the start of long-term co-operation between the two parties that could, for instance, see O2 provided with wholesale access to TalkTalk’s fixed-line network.
Harding also said that although TalkTalk had held talks with various parties, Telefónica UK had offered it the best deal.
She dismissed suggestions of TalkTalk securing first mover advantage in what is still an embryonic quad-play market in the UK, adding that the company had been years behind others in launching TV services but had now overtaken the likes of BT, from instance, in subscriber numbers.
The deal with Telefónica UK covers a “small sliver” of 1,800 MHz spectrum which, according to Harding, works well inside buildings.
Harding also said that the agreement with Telefónica UK would have no effect on TalkTalk’s Capex guidance, which was 6% of revenues.
