TalkTalk enters £1.5bn joint venture for fibre broadband roll-out
- Credit: PA
TalkTalk is laying the groundwork for a broadband infrastructure drive by launching a joint venture with Infracapital to roll-out full fibre to three million homes and businesses.
The telecoms firm said £1.5bn would be invested in a new company, which will ramp up competition and help shift Britain's digital infrastructure back in line with major European nations.
Infracapital, an infrastructure investment arm of M&G Prudential, will take an 80% slice of the new company and make an initial £400m investment, with TalkTalk owning 20% and stumping up £100m.
The move comes as TalkTalk tapped investors for £200m to shore up its balance sheet, help drive customer growth and underpin its fibre investment plans.
The share placing will be 19.99% of existing share capital, with executive chairman Sir Charles Dunstone and other top-level bosses taking up to £40m.
You may also want to watch:
However, the firm said it would have to cut its dividend to 2.5p in order to fund the investment drive.
Sir Charles said: 'It's 12 months since I announced my intention to take a more active role in the management of TalkTalk.
- 1 'It's not even that short' - schoolboy, 14, put in isolation due to haircut
- 2 'Red-and-white spray paint doesn't count' - three danger lorries stopped
- 3 Norfolk man found drunk at wheel twice in less than a month
- 4 Norfolk set for dry week with temperatures to rise
- 5 'Second time this year' - Armed police called to Norwich street
- 6 Why your phone might warn you of a 'terror attack' today
- 7 Nick Knowles joins outcry as Norfolk police told to close Twitter accounts
- 8 Two Norfolk restaurants in top five 'secret' places to eat on English coast
- 9 Hundreds flock to see exotic birds in Yarmouth bushes
- 10 Hot property - Homes selling just days after being on market
'Since then, we have reset the business and returned it to quarter-on-quarter customer growth.
'By signing heads of terms with Infracapital we are making good progress towards putting TalkTalk at the heart of Britain's fibre future by building a full fibre network, bringing faster, more reliable internet to millions of homes and businesses.
'Looking ahead we see real opportunity to continue growing the core business whilst also investing in full fibre.
'We have therefore strengthened our balance sheet and temporarily reduced our dividend to take full advantage of the opportunities available.'
The firm also updated on performance, with customer numbers rising by 37,000 in the third quarter, compared to 26,000 in the quarter before.
Churn levels – the rate of customers moving to another provider – dropped to 1.3% over the three-month period in contrast to 1.6% in 2017.
Sir Charles said the firm was on track for 'strong earnings growth' of 15% for 2019 and would significantly drive down costs.
Shares in TalkTalk slumped in November after the telecoms group dived to a half-year loss and warned over profits as it took a hit from efforts to secure more customers.