TalkTalk hangs up on Phorm agreementTalkTalk follows BT, distances itself from Phorm

08 July 2009

TalkTalk home phone and broadband logo

Internet tracking technology company Phorm today announced that TalkTalk broadband had pulled the plug on its agreement with the firm.

The statement came just days after Phorm's shares tumbled 40% when BT said it had no immediate plans to use its controversial software, which collects information on individual's web use for advertising.

Shares in Phorm slumped a further 13% today following its announcement that TalkTalk - which is part of the Carphone Warehouse group - ended its arrangements with the firm.

BT Phorm trial

TalkTalk recently grew to be the second biggest broadband provider in the UK behind BT, with around 4.25 million subscribers, following a deal to buy the UK operations of Italian firm Tiscali.

"The directors note that this relationship had not extended to any form of trial in contrast to BT and some international internet service providers (ISPs)," the company said today.

BT had conducted a trial of the Webwise technology but said earlier this week that it would not be deploying the software as it looked to concentrate on developing next generation broadband.

Phorm shares slide

The decision - the UK's biggest broadband provider with 4.8 million customers - sent Phorm's shares tumbling, wiping more than £35 million from the value of the company.

Phorm's Webwise software stores information on the sites web-users visit so that they can be targeted with advertising on other pages.

The technology has been met with protest from privacy campaigners, concerned about the invasiveness of the information stored on individuals.

But Phorm says the software is fully anonymous and gives web users regular opportunities to turn it off.

Phorm privacy matters

The company today said that BT had "stated that privacy was not a factor in their decision making".

Phorm said it continued to have an agreement with BT, which "continues to believe that the interest-based advertising category offers major benefits for consumers and publishers alike".

A spokesman for Phorm said he could not give details on the nature of contracts with ISPs.

It said Virgin Media shared this belief and was extending its review of "potential opportunities" with suppliers, including Phorm, before making any commitment in the area.

Phorm is trialling its software with South Korea's largest ISP and involved in more than 15 other markets, with discussions with several major international broadband operators under way.

© 2009 The Press Association

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