Utility Warehouse Grows to 341,392 UK Broadband Customers

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Energy and communications provider Telecom Plus, which trades as UW (Utility Warehouse), has published their latest biannual (H1 FY23) report and revealed that they ended the period with 341,392 broadband ISP customers (up by 17,769 in the last 6 months) and 364,062 mobile customers (up by 39,289). Aside from that, there's not a lot new to report in today's update, except that it follows a few weeks after the company sign a new, long-term wholesale agreement with TalkTalk in October (here). The deal will enable UW to harness TalkTalk's growing platform of alternative full fibre (FTTP) network providers (e.g. Openreach, FreedomFibre, CityFibre and CommunityFibre) and thus give their broadband customers more choice.

NOTE: The operator's mobile service is supplied via an MVNO deal with BT (EE).

Overall, the operator's total revenue was up 51.5% to GBP562.4m (2021: GBP371.3m) and Telecom Plus also reported that statutory profit before tax was up 46.2% to GBP29.1m (2021: GBP19.9m).

Andrew Lindsay, Co-CEO, said:

"As the pressures on household budgets mount, we continue to offer UK families what they want: the lowest priced energy on the market, savings on their mobile, broadband and insurance bills, cashback on their daily spend, and additional earnings for recommending UW to their friends and families. The business is growing faster than ever, at an annualised rate of almost 24%. With inflationary pressures showing no signs of easing, we expect demand for what we offer to remain high, supporting our progress towards our target of welcoming an additional one million customers in the next 4-5 years."

We've also extracted the latest broadband and mobile update from their results, which has been pasted below.

Broadband and Mobile

Our mobile service, spearheaded by our highly competitive unlimited data SIM proposition, continued to grow rapidly during H1 (+12%). We have invested in improvements to both the provisioning experience, with better automation of our activation processes, and the in-life account management experience to drive advocacy amongst our mobile service users. We also extended our long-standing supply agreement with EE until 2028.

Broadband growth was relatively muted across the period (+5%) when compared with the growth of our other services. This reflects both the increasingly high reliance consumers place on their connectivity and the perceived risk of disruption associated with switching, and the redesigned bundle proposition that we launched in March 2022 (allowing customers to access our lowest energy prices by taking insurance as one of their qualifying services, with a knock on effect on broadband take up). We are continuing to invest in the automation of our provisioning processes in order to assure customers of a seamless switching process, and anticipate that Ofcom's 'One Touch Switch' programme will further reduce switching friction for consumers.

The ongoing full fibre roll-out continues to underpin market activity focussed on the 'tease and squeeze' acquisitional pricing tactics that have been, or are being, addressed by regulation in Financial Services and Energy. The majority of the big suppliers subject all their customers (including those in contract) to automatic CPI-plus annual price rises, which drove a c.9% increase to many consumers' bills in the spring. With current inflation forecasts, we expect this will rise even further over the coming months, and our strategy of guaranteeing no in-contract price rises leaves us well placed to grow in response to this dynamic.

We signed a new, long-term agreement with TalkTalk in October. The significantly improved terms will help us accelerate our broadband growth whilst maintaining an increasingly profitable proposition over the medium to long term. We are excited that this new agreement will enable us to benefit from TalkTalk's growing network of alt-net fibre relationships, giving UW customers access to the widest range of full fibre connectivity in the market in due course.

At a time when cost of living pressures continue to rise, and other major broadband providers are imposing automatic inflation-linked price rises on their customers, we have not only maintained our existing fibre broadband prices throughout 2022, but have also committed to freezing them throughout the winter ahead.

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