BT, the UK’s largest broadband provider, has agreed to take over TalkTalk and pull the struggling operator out of administration. The deal keeps services running for TalkTalk’s 1.5 million retail customers and one million wholesale customers, and the administrator, Alvarez & Marsal, said it also gives certainty to the company’s 900 staff in Salford.
BT puts the total cost of the rescue at £400m. That sum covers the purchase price and fees, TalkTalk’s expected £60m loss for this year, and the £100m that TalkTalk owes BT’s Openreach division, which BT will in effect write off. TalkTalk started life as a challenger to BT and was listed in London before private equity took it over in 2021. Since then it has lost customers and built up £1.5bn of debt, and it made a £100m loss last year. It was still the fourth biggest provider between March and June, with 6.6% of customers according to Opensignal, against 32.5% for BT, 19.9% for Sky and 19.1% for Virgin Media.
BT chief executive Alison Kirkby told the BBC’s Today programme that the group was the only viable buyer, warning that vulnerable households and emergency services could have lost their connections if TalkTalk had collapsed. Competitors take a dimmer view. Virgin Media described the takeover as a “stitch-up masked as a rescue deal in the public interest”. Tom O’Hagan, a former TalkTalk executive who led a rival bid, said he feared less choice and higher prices for homes and businesses, particularly in the wholesale market, where TalkTalk’s PXC subsidiary was BT’s main competitor.
The Competition and Markets Authority must clear the deal and has until 19 October to report. The Department for Culture, Media and Sport has also given itself the final decision on public interest grounds once that report is in. Culture Secretary Lisa Nandy said phone and broadband networks are “vital national infrastructure” and that a TalkTalk failure would put hospitals, schools and emergency care at risk. Tom Smith, a competition lawyer and former legal director at the CMA, said the regulator will weigh the deal against what would have happened without it, including whether other bidders would have been less harmful to competition.
For now, customers do not need to do anything. Ernest Doku of Uswitch said broadband and landline services carry on as normal, but called on BT to explain promptly what the change means for contracts, prices and service. Ofcom says customers should be able to leave a contract without an exit fee if a new owner raises prices beyond the agreed terms. BT said it welcomed the government’s involvement and would work constructively with ministers and the CMA during the review.
