UK telcos’ anti-churn strategy will disrupt UK market, says TalkTalk

The view of telco service providers BT and TalkTalk that TV is primarily an anti-churn tool to protect their broadband base is bringing a significant disruptive element to UK pay TV, according to Henrik Karlberg, director of pay TV, TalkTalk TV.

Karlberg, speaking on a panel session at the Digital TV World Summit in London,  said content was now being used as an anti churn  tool rather than as a growth driver.

BT’s investment in sport content is a signficant disruptive move, he said. “Who would have thought that BT would invest in sports channels?” he said. BT’s move meant that customers now had to go to multiple vendors for content, which added complexity, he said. “For customers prices will definitely go up,” he said.

Karlberg said that for TalkTalk, TV is certainly seen as a way to protect its broadband base, leading it to adopt the alternative strategy of acting only as a distribution provider for third-party providers.

“My strategy is more to be a content enabler,” he said. “It’s about aggregating the content wherever it comes from. It’s more about anti-churn rather than putting ‘content first’.” He said that TalkTalk could potentially invest in content if its subscriber base warrants that shift, however. “It might change if we grow the base from the just over half million TV customers we have at the moment,” said Karlberg.

Karlberg said that BT’s investment in sport content made economic sense, despite the apparently vast sums of money involved. “It sounds like a lot of money for BT in the UK but when you compare with the kind of numbers in the US, it makes sense,” he said.