BT, the UK’s biggest broadband provider, has agreed to buy rival TalkTalk out of administration in a deal designed to stop the company from collapsing. The takeover ends months of uncertainty over TalkTalk’s future, and services for its customers will continue as normal while regulators and the government review the transaction.
TalkTalk has 1.5 million retail customers and one million wholesale customers across the UK. BT said the purchase will cost it £400 million, a figure that includes the price, fees, TalkTalk’s expected £60 million loss for this year and the write-off of £100 million that TalkTalk owes BT’s Openreach division. TalkTalk, once listed on the London Stock Exchange, was bought by private equity in 2021 and has since built up debt while losing customers. It now carries £1.5 billion of debt and lost £100 million last year.
BT chief executive Alison Kirkby told the BBC’s Today programme that BT was the only viable option to take the business forward, and that the deal offered TalkTalk customers “a safety net”. The administrator, Alvarez & Marsal, said it also brought certainty for TalkTalk’s 900 staff in Salford, Greater Manchester. Despite its problems, TalkTalk was still the fourth-largest broadband provider in the UK between March and June, with 6.6 percent of customers, according to Opensignal. BT had 32.5 percent, Sky 19.9 percent and Virgin Media 19.1 percent.
Rivals have pushed back. Virgin Media, which has reportedly tried to buy TalkTalk in the past, called the agreement a “stitch-up” that would strengthen BT’s hold on the market. Tom O’Hagan, a former TalkTalk executive who led a competing bid, warned of reduced choice and possibly higher prices for consumers and businesses. He was especially concerned about the wholesale market, where TalkTalk’s subsidiary PXC has been BT’s main competitor.
The Competition and Markets Authority must approve the takeover, and the Department for Culture, Media and Sport has given itself the final decision on public interest grounds once the regulator reports. The department has set a deadline of 19 October for the authority’s verdict. Culture Secretary Lisa Nandy described phone and broadband services as vital national infrastructure, and BT said it would work constructively with the government and the regulator. Ofcom says broadband customers should be able to leave a contract without an exit fee if a new owner raises prices beyond what the contract allowed.
