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Broadband and TV provider has lost 170,000 customers since November 2010, but revenues remain stable at £422m

TalkTalk has reported a fifth consecutive quarter of customer defections, with 50,000 lost in the three months to the end of December as the company continues to trail larger rivals BT Group and BSkyB.

The broadband and TV provider has lost 170,000 customers since November 2010, bringing its total down to 4.079 million, as BT and Sky continued to attract the lion's share of new broadband customers and poach business from rivals.

However, TalkTalk's share price raced up 9% to 130p in morning trading on Tuesday, as investors cheered a raised profit forecast from chief executive Dido Harding.

Full-year underlying earnings are now expected to be between 18% and 19% of revenues, up from previous guidance of 17% to 18% and an improvement on last year's 15.6% margin.

Revenues in the third quarter remained stable, rising £1m from the second quarter to £422m, but were down 5% on the same period the previous year. However, the business is becoming more profitable as the number of customers using its network of lines "unbundled" from BT's exchanges continues to grow.

Average revenue per user for TalkTalk broadband customers increased to £25.30, compared with £24.70 in the previous quarter.

"We are growing the number of customers on our network every week and that is what is driving the performance of our business," Harding said.

"We have continued to improve our customers' experience with further falls in customer service call volumes and an increase in the rate of online self-service. As a result, churn has stabilised and we remain confident of a return to positive total net adds in the first half of 2012."

TalkTalk had originally hoped to start growing customer numbers in the final months of 2011, but a mounting subscriber exodus delayed that target.

Formed through the rapid mergers of broadband companies including Tiscali, Pipex and Carphone Warehouse, TalkTalk has been struggling to integrate its billing platforms.

It was fined £3.1m by Ofcom after wrongly billing thousands of Tiscali customers for services they did not receive.

The group has lost 43,000 broadband customers in the past two quarters, including 7,000 of the 200,000 former Pipex subscribers in the most recent period.

Levels of customer churn were not disclosed, but TalkTalk said it remained stable on the previous quarter despite the Pipex defections, with call volumes to its customer service centre down 26% year-on-year and 60% of customer contacts now taking place online.

TalkTalk unbundled – installed its own equipment – in 130 new BT exchanges during the quarter, bringing the total to 2,338, with a further 119 expected in the final quarter.

The work is designed to improve customer numbers and profitability, because TalkTalk can offer lower prices but still make a bigger profit margin on unbundled lines.

The group said 80% of its customers are now on fully unbundled lines.

HomesafeTM, an optional product which blocks pornography and self-harm sites, has been activated by a further 60,000 customers, bringing the total to 270,000, despite concerns raised by internet privacy groups over its ability to track every website visited by a user.

The company is about to begin consumer trials of on-demand internet TV service YouView, a joint venture with other backers including the BBC and BT.

YouView and is on track for its scheduled launch this spring, TalkTalk confirmed.

The arrival of YouView could boost the numbers buying super-fast fibre optic broadband from TalkTalk, which remain low at just 5,000.

"At the moment there are very few households who genuinely really need fibre but that will change over time as demand for multiple live video viewing within a single household grows," Harding said.

BT cheers City as profits rise on broadband growth

BT Group reports 18% rise in profits and announces plan to roll out 330Mbps broadband on demand to business

BT Group took just over half of the UK's new broadband subscribers in the last three months of 2011 and cheered the City by indicating it would review its fibre broadband investment, with a focus on getting businesses to pay for installation.

The company won a 56% share of new retail broadband subscribers, adding 146,000 customers in the company's third quarter and taking its UK total to 6.1 million. The announcement came as BT chief executive Ian Livingston announced upbeat forecasts for the full year and a rise in third quarter earnings, prompting a 6% share price rise in morning trading.

A spokesman indicated BT would maintain its promised £2.5bn investment in rolling out fibre. But the commitment to running fibre cables to the doorstep of 25% of UK premises by 2014 is likely to be cut, with BT instead offering speeds of up to 330 megabits per second for businesses on demand, so long as they are willing to pay to be connected.

The new 330Mbps service will be available from spring 2013 and is likely to involve installation costs of up to £1,000. It will deliver fibre to workplaces on request in areas where BT already runs fibre to street cabinets.

It is expected to appeal to small businesses rather than residential customers, and is likely to be available to more than 10m premises from launch and about two thirds of UK premises from 2014.

"Fibre to the premises is a significant development for broadband Britain," said Olivia Garfield, chief executive of BT's Openreach division, which resells the BT network to other telecoms companies and BT Retail.

"This will be welcome news for small businesses who may wish to benefit from the competitive advantage that such speeds provide."

A spokesman for BT said of the original commitment to building fibre to 25% of UK premises: "That was only an estimate which we gave some years ago before we knew we could offer fibre on demand. We will have to sit back and review that following these developments."

BT is also doubling the speed of its standard fibre broadband product, from 40Mbps to 80Mbps, from this spring. This will as previously promised be available to two-thirds of the UK by 2014.

The take-up of super-fast broadband increased to 400,000 of BT's retail customers, with 95,000 added in the three months to 31 December.

Elsewhere, Ian Livingston brought forward his target of generating £6bn in annual underlying earnings by 2013 to the end of this financial year. However, BT said its pension deficit ballooned to £4.1bn due to high inflation and the knock-on impact of the government's quantitative easing measures.

Group revenue was £4.8bn for the quarter. Excluding the impact of cuts to mobile termination rates, revenue was down 1.8% in the first nine months, in line to reach BT's target of –2% to flat for the full year, and halting years of revenue slides by the end of next financial year.

Profit before tax was up 18% to £628m for the quarter, while earnings (before interest, tax, depreceiation and amortisation) rose by 3% to £1.5bn in the quarter. Net debt fell 11% to £7.7bn, in line with previous quarters which have seen BT reduce its borrowings by £3.3bn over three years.

There was no news from BT about the early payment some analysts had expected to reduce its yawning pension deficit, which has risen from £1.4bn in March 2011.

The company blamed inflation, saying: "The deficit includes the impact of particularly low real corporate bond yields partly reflecting the impact of quantitative easing and recent inflation being higher than the long term assumptions. This higher inflation will be applied to the annual pension increase in April and has contributed to increased liabilities."

Openreach helped boost BT's overall earnings by increasing revenues by 5% to £1.3bn and earnings by 7% o £591m. Capital expenditure reduced 1% thanks to lower investment in copper broadband as the focus switched to fibre.

BT Global Services, which provides networks to multinational, saw revenues fall 4% to £1.9bn for the quarter, with earnings up 2% to £144m.

Total order intake for the quarter was £1.6bn, after contract wins from Sainsbury's and Standard Life in the UK and Bristol-Myers Squibb and the European Parliament abroad. Orders were up 50% so far this year in Asia Pacific and Latin America.

BT Retail revenue decreased 5% reflecting a decline in calls and lines revenue and lower IT hardware sales. TV service BT Vision added 39,000 to BT Vision net customers in the quarter. Business revenue fell 6% because of lower IT hardware sales "reflecting tougher market conditions".

BT Wholesale revenue fell 8% due to a £64m reduction in transit revenue mainly driven by mobile termination rate cuts. Total order intake was £340m, including a three year extension to a calls contract with Virgin Media and a renewed six year outside broadcasting contract with Sky Sports.

David Molony, analyst at research company Ovum, said: "Openreach is delivering good results on the back of the company's fibre investment. However, the main focus must remain on BT Retail and BT Global Services.

"BT must keep innovating to deliver faster broadband speeds and more enticing bundles for consumers, as well as developing Global Services' capabilities through cloud services, professional services and further regional investment."

Court rules that 122 2G licences must be scrapped, which could spell the end of some of the smaller mobile phone firms

India's top court has ordered the government to cancel 122 licences granted to mobile phone companies during an irregular sale that has been branded one of India's largest corruption scandals.

The verdict is likely disrupt the country's massive mobile phone market and is a further embarrassment to the government of Manmohan Singh.

The 2008 sale of second-generation - or 2G - licences at cut-rate prices in a first-come, first-served process netted the government only 124bn rupees (£1.6bn). Government auditors said the sale might have cost the treasury as much as £22.5bn in potential revenue.

Subramanian Swamy, an opposition politician who filed the court complaint, said the court ruled that the 122 licences granted be scrapped and a fresh auction held in the next four months.

Analysts expect the auction to raise an estimated 1tn rupees (£13bn).

Among the companies that will lose their licences are Unitech Wireless, which is in collaboration with Norway's Telenor, and Swan Telecom, which is 45% owned by Dubai-based Etisalat.

The licence cancellation affects 11 companies, mainly newer and smaller firms that were late entrants into the market. Larger companies, such as Bharti Airtel, IDEA Cellular, Tata Teleservices and Reliance Communications, received nearly all their licences in earlier agreements with the government and are largely unaffected.

Ankita Somani, a telecoms analyst, said the decision would likely spell the end of some of the smaller, struggling mobile phone companies and give an opening to those remaining to raise prices for the country's nearly 900m mobile phone accounts.

"It'll create consolidation in the industry … and a price rise," she said.

During the 2008 sale, some licences were awarded to ineligible participants who in turn sold their stakes at much higher prices than they bought them from the government.

India's former telecommunications minister Andimuthu Raja, who was forced to resign because of the scandal, is facing charges of abusing his position. He denies any wrongdoing.

Kazuo Hirai named new Sony CEO

The PlayStation boss will replace Howard Stringer at a crucial time for the consumer electronics giant

Sony has confirmed that PlayStation boss Kazuo Hirai will be the company's next chief executive. He will take over from current CEO Howard Stringer in April, with Stringer assuming the role as chairman of the board of directors.

The move comes after weeks of speculation – and following a challenging business period for the consumer electronics veteran. The company is facing its fourth consecutive annual loss, and stock value has dropped by more than 50% since Stringer became the company's first non-Japanese CEO in 2005.

The strong yen and the effects of last year's devestating earthquake have made for difficult business conditions, but Sony has also lost out to key rivals including Samsung in the television sector and Apple in computing and digital media.

"The path we must take is clear," Hirai said in a statement. "To drive the growth of our core electronics businesses – primarily digital imaging, smart mobile and game; to turn around the television business; and to accelerate the innovation that enables us to create new business domains.

"The foundations are now firmly in place for the new management team and me to fully leverage Sony's diverse electronics product portfolio, in conjunction with our rich entertainment assets and growing array of networked services, to engage with our customers around the world in new and exciting ways."

If the future of Sony is about converged media platforms and digital services, Hirai would seem to have the experience to turn things around. As head of the PlayStation business, he has overseen a period in which the PS3 console recovered from the dominance of the Nintendo Wii to reach a global installed user base of more than 60 million.

The machine has also become a media hub offering on-demand music and video content from Sony services as well as various partnerships with other content providers. Hirai also navigated a major controversy last spring when hackers broke into the back-end servers of the PlayStation Network and attained the details of millions of customers.

The television manufacturing business could well be the toughest nut to crack, though – it hasn't been profitable for more than seven years. Last year, Sony sold its stake in a joint LCD panel manufacturing venture to partner Samsung for £600m.

Hirai may well decide that the future is about innovating in digital services rather than screen technology. With the rise of internet connected smart TVs, Sony could concentrate on developing interactive services, while outsourcing screen manufacture to countries such as Taiwan, where producton costs are lower.

Meanwhile, in the mobile sector, Sony has spent £920m buying its handset partner Ericsson out of their decade-long deal. The idea is that it will now be able to react faster to the innovations of rivals like Apple.

However, Sony's attempts to profit in the growing tablet market, with the launch of its Tablet S and Tablet P devices, have not been hugely successful: the devices failed to impress critics and the Tablet S was subject to a $100 (£63) price cut in January.

Sony, once a leader in consumer electronics innovation with its Walkman and PlayStation brands, has a lot of work to do to figure out its place in a rapidly evolving market. Hirai, with experience in the expensive, dynamic and complex video games sector, may be best placed to oversee the transition.

The Full Monty tariff, offering 'all you can eat' calls, texts and internet useage, could spark price war among networks

T-Mobile has thrown down the gauntlet to the other mobile providers after launching a phone tariff offering unlimited calls, texts and internet access.

Prices for the Full Monty tariff start at £36 a month, although customers have to sign a two-year contract. Those taking out the plan can take their pick of all the handsets in the T-Mobile range, including iPhone, Android and BlackBerry phones. The firm insists the tariff will not be subjected to a fair use policy, meaning those who sign up really will have unlimited internet, texts and calls.

The deal reverses the trend of recent years. The original iPhone came with free internet access, but more recent tariffs have set data download limits, often as low as 500MB a month.

T-Mobile UK's Ben Fritsch said the mobile network developed the plan on the back of increased sales and demand for data-hungry smartphones. "Over the past two years we have seen a rise in mobile internet use of over 250%, which reflects the consumer trend of being 'always on' wherever they are. However, consumers also want to retain a more personal level of communication by calling or sending a text," he said.

Customers on the plan will also be able to use their phone for tethering (using it as an internet connection for a laptop or tablet) at no extra cost.

The tariff will be available, including on a 16GB iPhone 4S for £99 upfront, from £36 a month for two years with unlimited internet access, texts and calls to other T-Mobile customers, but a limit of 2,000 minutes for calls to other networks. If you think you will exceed that you can go completely unlimited across all networks for £41 a month.

The same iPhone from O2 on a two-year contract would also cost £99.99 upfront, but comes with 600 minutes, unlimited texts and just 500MB of data a month. The only other operator to offer unlimited internet data at a similar price is Three.

The Full Monty will also be available on the Samsung Galaxy SII and HTC Sensation XE with no upfront cost on the £36-a-month plan.

Before you sign up, be aware there are still a few things for which you will be charged: calls to international numbers and those beginning 08 (including 0870) or 070 are charged at 40p a minute; and picture messages are not included in the text allowance.

Dominic Baliszewski from Mobilechoices.co.uk says smartphone users should check their usage before rushing to switch.

"The plan will provide excellent value for customers who make a lot of calls, send a lot of texts and do a lot of downloading. Chewing through 500MB to 1GB of data in a month is easy to do with an iPhone," he said.

"However, anyone who sends 300 texts and makes 100 minutes of calls a month will almost certainly be wasting their money. Also remember that other providers may follow suit and launch their own 'all you can eat' tariff to compete with T-Mobile, so it could be worth waiting to see if a price war erupts, lowering costs even more for consumers."

Apple's giant windfall: how will it be spent?

The creator of the iPhone may soon have more ready cash than the US government and analysts are speculating about acquisitions. But the firm may be more focused on a daring foray into pay television

Apple's chief executive, Tim Cook, may be top of the league of America's best-paid company bosses, newly showered with $378m (£240m) in cash and stock options, but his consumption has never been conspicuous. There are no superyachts, no garages full of luxury cars. Even after selling more than $100m in stock, Cook continued to rent a modest home. In 2010, with the multimillion-dollar Californian real estate market at his mercy, he eventually bought a four-bedroom, ungated property in Palo Alto for a grand total of $1.9m.

There may have been growing concerns about Apple's human rights record at the factories in China that manufacture some of its products; but there was little evidence in its recent record-breaking results of consumers voting with their wallets.

Apple has now amassed an extraordinary $98bn cash pile. For the frugal Cook, it is an almost embarrassingly large sum. The hoard could easily reach $150bn by the end of this year – more than the US government's operating cash balance.

Wall Street speculation about how Cook will choose to spend his reserves is now at fever pitch. Unconfirmed reports suggest the company is about to take one of the biggest gambles in its history: an internet-connected TV. If it works in the way the iPod and iPhone worked, the iTV will light a fire under Hollywood's mighty film and cable television conglomerates in the way its predecessors disrupted the giants of music and mobile telephony.

An exciting prospect, but a frightening one for investors, who would prefer Apple to share some of its profits before gambling them on new ventures. The company's late founder, Steve Jobs, was not a fan of dividends, and between 1995 and his death last year, Apple steadfastly refused to pay one.

Under Cook, the mood music has softened. "I would characterise our discussions today as active, about what makes the most sense to do with the cash balance," chief financial officer Peter Oppenheimer said during a conference call last week. "But we don't have anything to announce specifically today."

After such hints, analysts now expect a payout this year. They may have an ally in Disney chief executive Bob Iger, who took Jobs's seat on the Apple board. After successful collaborations on hit films Toy Story and Finding Nemo, Iger made Jobs his largest shareholder in 2006, when Disney paid $7.4bn in shares for Jobs's computer animation studio Pixar (bought for a mere $5m in 1986).

Disney is a fan of big dividends. After record sales and profits, it increased its own shareholder payouts in December by 50% to $0.60 a share. The irony was not lost on Apple investors, who watched Jobs's estate, the Steven P Jobs Trust, reap $82.8m from 138m Disney shares.

Around two-thirds of Apple's hoard is held overseas, which limits the amount of cash that can be shared with investors because the US government allows businesses to defer paying tax on money earned abroad until it is repatriated.

Apple and two other technology giants, Google and Cisco, are lobbying Congress for a tax holiday on more than $1 trillion in offshore profits, but even so, Tavis McCourt at broker Morgan Keegan reckons Apple could fund a dividend from its US-earned cashflow alone, without having to dip into the reserves. This would produce a payout of between $10 and $11 a share each year. Failing that, a share buyback would be welcome – or Apple could blow a few billion on a major acquisition.

"Investors get scared about large accumulations," warns McCourt. "The more cash stockpiles, the more fear builds they could make a big dumb acquisition."

There are precedents for this among technology companies, as fading giants turn to retail therapy in search of a pick-me-up. Last year, Microsoft paid $8.5bn for loss-making internet telephony group Skype, while Hewlett-Packard, the world's largest PC maker, parted with an extraordinary £7bn for the British search software group Autonomy after being faced with a decline in its core products, as tablets and smartphones gain popularity.

The often-cited possibility of Apple buying a mobile phone network would get a thumbs-down from Wall Street. Networks are expensive: America's smallest national operator, T-Mobile, would have cost AT&T $39bn had the takeover deal been approved. Apple's cash could buy it masts in its home market and two or three others – not enough to compete with a Vodafone or a Telefónica, but a surefire way of angering its best customers, the mobile firms.

There are two obvious big-ticket investments Apple might contemplate. The first would be to expand its army of 350 stores, particularly in the far east. As it branches out, Apple could accept lower retail margins in favour of better customer service.

Last year Chad Ramey, one of Apple's "geniuses", as it calls its technology helpdesk staff, quit its Arrowhead store in Glendale, Arizona after three years and published an open letter complaining of a drop in standards. The retail experience had gone from "something truly spectacular" to Walmart-style "big-box retail", he warned. Employees were "forced to worry more about pushing business leads and reaching numbers, rather than truly focus[ing] on the customer's problems," wrote Ramey. A few more staff in a few more Apple stores could help customers feel more supported as they wrestle with all the new technology in their homes. The shops could have an important role to play if Apple forges ahead with its rumoured foray into television.

The company's lips are sealed, but factory reports suggest a fully-fledged smart TV is planned for later this year. Unlike Apple's existing TV gadget, a small box that connects your existing set to the internet, the iTV will come with a screen as well as a brain – and a subscription to iTunes, according to professional Apple-watcher Carolina Milanesi at research firm Gartner.

In the same way that iPhone buyers cut the upfront cost of the handset by signing a two-year calls contract with a network, customers could spread the cost of a TV by taking a subscription to rent films and drama series from the iTunes store.

Milanesi is convinced that the new device "will definitely come with a service". "It will be what you have today on iTunes, with a subscription rather than just pay-per-view. What are they going to offer that Netflix doesn't? It comes down to content. It has to." To persuade customers to spend more, or even swap their Sky or Virgin premium channels in favour of an iTunes subscription, Apple will need an eye-catching array of content. But exclusive first-run pay-TV rights do not come cheaply.

Does Apple want to be a media company? Arguably, it already is. Gross revenues from iTunes, which totalled $5bn (£3.2bn) in 2011, are greater than ITV's £2bn turnover and on a par with the BBC's annual budget of £3.5bn. They are equivalent to a third of Amazon's $15bn takings in 2010 for global media sales.

Of course, Apple may prefer to let others do the work. Its spokespeople took the rare step of going on the record to deny a recent report that it was planning to bid against Sky for English Premier League football TV rights.

In any case, online TV and film rental services such as Netflix and LoveFilm have financial firepower and are already snapping up top-flight content. And, foreseeing the threat, incumbent pay-TV operators like America's cable companies or Sky in the UK will be manoeuvring to shore up their own position.

What video-on-demand companies need in order to achieve lift-off is the kind of user-friendly, elegant interface that Apple excels at creating. But whether or not Cook decides the future lies in selling pay TV, he will find it increasingly hard to resist sharing the spoils with Apple's shareholders.