Costs of TalkTalk breach amount to £60m

News by Danielle Correa

TalkTalk has revealed that the October data breach has cost the firm up to £60m, resulting in the loss of over 100K customers.

TalkTalk has revealed that the October data breach has cost the firm up to £60 million, including exception losses. However revenue increased 1.8 percent during the final quarter of the year from October through December 2015.

According to TalkTalk's first financial report of 2016, an estimated 101,000 customers left the company following the hack. 

However, Kantar Worldpanel research estimated the number of lost customers to be nearer 250,000.

Many customers were upset at how the firm handled the attack as TalkTalk did not allow people to terminate contracts without incurring charges, offering them a free upgrade instead.

“Although it took longer than expected to return the business to normal operational effectiveness, customer sentiment improved much more quickly as a result of the actions we took,” the report stated.

The Guardian reports that online sales operations shut down after the attack, leading to the company gaining fewer customers than expected.

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 cyber-attack. Both churn and new connections recovered during December and January and independent external research have revealed that customers believe that we acted in their best interests.”

TalkTalk expects to deliver a full years' worth of results in line with market consensus and approximated about £255m to £265m in earnings before taxes, interest, depreciation and amortisation are factored in, and the dividend would grow by 15 percent. 

“We remain very confident in the long-term outlook for the group: in addition to our own focus on existing customers' experience and improving TalkTalk's brand reputation, we see regulatory opportunities that will support both the profitable growth of our fixed line business, and our ambitions in mobile,” Harding said. 

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