The UK’s biggest broadband provider, BT, has agreed to rescue rival operator TalkTalk in a takeover.
The takeover would end of months of speculation over the future of TalkTalk and mean services for its millions of customers will continue as normal.
Some have raised concerns about the increased control BT will have over the broadband market as a result of the deal.
BT chief executive Alison Kirkby said the deal provided “a safety net” for those who customers rely on TalkTalk. The administrator said it also provided certainty for TalkTalk’s 900 staff.
TalkTalk has 1.5 million retail customers and one million wholesale customers across the UK.
BT said the deal would provide “much needed and immediate reassurance” for TalkTalk’s employees as well as its UK customers.
“This includes vulnerable households, and connections that support critical national infrastructure providers across health, emergency services, defence, education, transport, banking and government.”
TalkTalk began as a challenger to BT in the broadband market. It was listed on the London Stock Exchange, but was taken over by private equity in 2021.
Since then, the firm has built up debt while losing customers, leaving it unable to pay some of those it owes money to.
The Competition Markets Authority (CMA) will need to approve the takeover, which would give BT greater power over the broadband market.
Tom Smith, a competition lawyer and former legal director at the CMA, said the regulator will be balancing that concern with other considerations.
“When the CMA looks at it, it will look at what would have happened if the deal wasn’t going through,” he told BBC Radio 4’s Today programme.
“If TalkTalk would have exited the market, for example, then really any deal is better than TalkTalk exiting, but then there might be alternative bidders as well that would have been less anticompetitive.”
BT has said it will cost the firm £400m to buy TalkTalk.
This includes the amount needed to buy TalkTalk from administration, fees, TalkTalk’s £60m loss for this year, and BT effectively writing off the £100m TalkTalk owes BT’s Openreach business.
