TalkTalk Telecom Group is the second largest fixed network operator and largest Local Loop Unbundling (LLU) service provider in the UK. Fixed-line network services are their major services.

Delivering Best Value to Users

By the end of 2009, TalkTalk had become the UK's biggest residential broadband service provider, with a customer base of 4.15 million. It was the first company to launch free calls between its customers with a revolutionary home phone package. It was also the first company to replace historically expensive broadband with a free service.

Today, TalkTalk's innovation capability is a beacon to many other UK service providers and its impressive achievements are highly recognized across the industry. More and more customers are also switching to this rapidly growing company: 36,000 new customers joined TalkTalk in Q3, 2009, which is more notable given that the UK broadband market is almost at saturation point.

"TalkTalk offers the best value," said Mr. Dorsman, Managing Director of TalkTalk. As head of the Networks Division, he runs and develops the TalkTalk Telecom Group's next generation network and services. "And we aim to provide this by offering great performance, service, and price – the key messages for TalkTalk, our residential phone and broadband brand."

Cost advantage has been a powerful dynamo behind TalkTalk's success. In 2004, the UK's telecom regulator, Ofcom, required BT to provide LLU services to other operators, including TalkTalk, enabling them to connect directly to consumers via BT's copper local loops and then add their own equipment to offer broadband and other services. This became a true enabler for emerging service providers, such as TalkTalk.

As a result, it was in a position to build its All-IP network at a scale that would support a very large residential customer base cost effectively. It also provided TalkTalk with an advantage over other competitors who were still running TDM network to support legacy services.

Next Generation Network Pioneer

TalkTalk was one of the first UK service providers to step into the next generation network (NGN). Ahead of incumbent operators, it started to deploy its NGN in 2005. Dorsman's original plan was to deploy 700 NGN switches covering 500,000 subscribers within a year. The Group's NGN leapfrogged to 1750 switches covering four million subscribers. It was on track to upgrade another 300 sites in 2010 and deliver 1Gbit/s capacity to each switch by 2011.

In terms of voice, TalkTalk has migrated to a next generation converged voice solution, IMS. In TalkTalk's access and core network, it spurned TDM and migrated to IMS, which delivers great cost benefits. The Group provides fixed-line Value-Added services to fulfill requirements for mobile VoIP (VoIP numbers being the same as fixed numbers), video services, and personal instant communication to improve user experience for home users.

Acquisition and Consolidation: 1+1>2

In 2009, TalkTalk acquired Tiscali, another UK broadband provider at a price of £234 million. The acquisition increased TalkTalk's market share in the residential market to 26%, ahead of BT's 25% and Virgin Media's 24%. The move also beefed up TalkTalk's ability to run a triple play service in the foreseeable future. Inevitably though, acquisition comes with duplication: around 1000 switches overlapped. How was TalkTalk going to achieve synergy on the network side? "There are some consolidations we can do particularly in the backhaul network," Mr. Dorsman stressed. "Moving Tiscali's large number of customers onto TalkTalk's unbundled network will deliver significant cost benefits. We are committed to extending our network by 300 new switches too and plan to go further where the economy is viable given the combined customer base we have."

TalkTalk also had many IT and billing duplications resulting from previous acquisitions. Network consolidation on platforms that include billing, CRM, customer care system, and IT system would require focused effort for TalkTalk. Acquisition is not just about adding up things, it is about synchronization, tripling or even quadrupling network synergy. By leveraging its NGN network and 4.2 million customer base, TalkTalk would keep gaining momentum and consolidate its market position.

"For us, 2010 is about maintaining our cost efficiencies, keeping our heads down, maintaining our capacity to innovate and building on the success we have already delivered. We are confident about the future." Dorsman added.

To achieve a bright future, TalkTalk was keen to foster a partnership with vendors, including Huawei. TalkTalk first started to work with Huawei in 2005. In five years, the relationship went from strength to strength. "It has been a successful partnership," Mr. Dorsman commented. "Huawei and TalkTalk are culturally aligned: we are both trying to achieve success quickly through innovation. Huawei has shown its appetite to be flexible, to innovate with the resources it has. The quality of those resources on the technical side can stand up to any kind of scrutiny or comparison. We are really happy to work with an organization like Huawei."