The budget ISP TalkTalk witnessed a huge customer exodus following a high-profile hack attack on its systems late last year.
It told the City on Tuesday morning that the security breach in October 2015—which affected 157,000 subscribers, some of whom had their “obscured credit and debit card numbers” stolen in the attack—had cost the Dido Harding-run company around £60 million. It said that it had suffered a direct “trading impact” of £15 million, after TalkTalk was forced to cut off access to its online services as it scrambled to secure its websites, following the breach.
During the firm’s last quarterly update in November last year, which significantly did not cover the period in October when TalkTalk came under attack, the telco warned its investors that the breach could cost between £30 million and £35 million.
“The reality is it’s taken longer to get the systems back up and running,” said TalkTalk’s chief beancounter, Iain Torrens, during a conference call on Tuesday morning. He confirmed that TalkTalk had swallowed a one-off cost of between £40 million and £45 million.
TalkTalk said 95,000 subscribers had vanished from the ISP in direct response to the hack attack. In total during the company’s third quarter, which ended on December 31 last year, TalkTalk lost 101,000 customers.
Harding insisted, however, that customers had “moved on pretty quickly” following the attack. Her choice of words were a little unfortunate, given that 95,000 had indeed moved on—into the loving arms of rival Internet service providers.
TalkTalk’s chief said that the company had seen “customers returning to normal trading levels in January,” and added that the “willingness to purchase from TalkTalk is recovering.”
She said that complaints to UK communications watchdog Ofcom had unsurprisingly spiked in November in response to the attack.
Meanwhile, revenues slowed significantly for the three months to the end of last year. The company confirmed that sales had been flat at just 1.8 percent during TalkTalk’s tumultuous quarter.
SOURCE: Dan Goodin | Ars Technica