Cyber attack cost TalkTalk up to £60 million

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Broadband provider faced trade loss of £15m plus “exceptional costs” estimated at £40-45m as a result of the October hack, according to its latest financial results

October’s cyber attack that affected more than 157,000 TalkTalk customers  cost the broadband provider around £15 million in trade, according to its latest financial results.

TalkTalk revealed a trading deficit of £15 million as a result of higher churn and foregone revenues during the three months ending December 31.

Overall, TalkTalk estimated that it lost 101,000 customers during the quarter, around 95 per cent of which was as a direct result of the hack

It also paid out £40-45 million in “exceptional costs” due to the hack. These cost included “the exceptional costs of restoring our online capability with enhanced security features, associated IT, incident response and consultancy costs.”

The costs also included free upgrades which TalkTalk offered to customers in the wake of the cyber attack. According to the broadband provider’s figures, 489,000 customers took up the deal (14 per cent of those eligible), which allowed all of its base toa dd a selection of the following to their package for free: TV content, a mobile SIM, unlimited UK landline and mobile calls or a broadband health check by experienced engineers.

CEO Dido Harding admitted it had been a challenging quarter for TalkTalk, but it was “encouraging to see the business returning to normal.”

“Our customers have responded well, with almost half a million customers choosing to take up our unconditional offer of a free upgrade,” she added.

“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. In fact trust in the TalkTalk brand has improved since just after the attack and consideration is higher now than it was before the incident.”

Overall, TalkTalk posted revenue growth of 1.8 per during the three month period, a significant slowdown on the 5.9 per cent growth posted in the previous quarter.

TalkTalk says that despite the impact of the cyber attack, it expects to deliver full year results “in line with market consensus”, offering guidance of £255– £266 million for earnings before interest, taxes, depreciation and amortisation.

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