LONDON (Reuters) - British broadband company TalkTalk (TALK.L) raised its revenue growth target on Thursday after it said more customers were adding TV and mobile services to their broadband packages as well as upgrading to faster fibre connections.
The group said it expected revenue to grow by 5 percent for the next two years, better than its previous 4 percent target, after it posted a 15 percent rise in earnings for the year to end-March.
TalkTalk, like its competitors BT (BT.L) and Virgin Media (LBTYA.O), offers a “quad play” of telephone, broadband, mobile and TV services, aiming to increase the amount each customer spends with it. Sky (SKYB.L) is also planning to add a mobile offer.
“Our value-for-money quad play is really working,” Chief Executive Dido Harding said on Thursday.
“By selling all four products, rather than focusing just on one, we are getting the broadband base growing, and we are seeing growth in mobile, fibre and TV.”
She said TalkTalk had sold 1 million additional services, such as TV and mobile, to customers in the last year, and it added 47,000 phone and broadband net customers in the final quarter.
Competition in the broadband market will ratchet up another notch in the summer when BT will start showing Champions League soccer on its TV service.
Harding said there was a lot of promotional “noise” from BT and Sky, but both were trying to protect their premium content products. “I expect to see a rational pricing environment continue,” she said.
She also ruled out buying Tesco’s (TSCO.L) mobile operation if the struggling supermarket group puts it on the block. “We’ve got a really strongly performing mobile business now, we don’t need to buy a base where customers are currently being overcharged,” she said.
TalkTalk posted earnings before interest, tax, depreciation and amortisation of 245 million pounds ($385.7 million), in line with market expectations, on revenue up 4.2 percent to 1.8 billion pounds.
Harding said the company was on track to meet its earnings margin target of 25 percent in its 2017 financial year.
Shares in the company, which have risen 22 percent since the start of the year, were trading up 1.7 percent at 369 pence at 0810 GMT.
Editing by Kate Holton and Vincent Baby