Cyber attack on TalkTalk racks up £60m in damages and loss of over 101k customers
TalkTalk reported a challenging quarter following the cyber attack on the mobile phone and broadband company in October, which saw more than 15,600 bank account numbers and sort codes stolen.
The huge financial backlash from the hack are thanks largely to TalkTalk providing all customers with free upgrades as part of its bid to instil confidence in the business, which was hacked three times in the last 12 months.
The company reported it took longer than expected to return the business to “normal operational effectiveness”, with the exceptional costs of restoring its online capability with enhanced security features, associated IT, incident response and consultancy costs, and free upgrades, expected to total £40m-£45m. The cost of the disruption in the third quarter was about £15m, it said in a trading statement, taking the total bill for the cyberattack to £60m.
The net loss of customers in the three months to the end of December reflected fewer connections and greater “churn” as fewer new customers joined and more chose to leave, following the shutdown of its online sales and service channels in response to the cyber attack. The period of online shut-down affected the company’s ability to upsell mobile, which is primarily purchased online and was not restored until January, as well as fibre and TV. But revenue increased 1.8% in the period, the third quarter of TalkTalk’s financial year.
Dido Harding, TalkTalk’s chief executive, said: “It is encouraging to see the business returning to normal after a challenging quarter that was dominated by the cyberattack. Both churn and new connections recovered during December and January and independent external research has revealed that customers believe that we acted in their best interest.”
“As the value for money telecoms provider we are well placed to benefit from the current regulatory reviews in the sector and expect to see quad play driving sustainable long term growth.”
The company said earnings before interest, tax and other items for the year ending in March would be £255-£265m and that the dividend would increase by 15 per cent.