BT Group stepped in to acquire TalkTalk’s consumer and wholesale businesses out of administration, effectively preventing a collapse of one of the UK’s major broadband providers.

The deal will result in a total cash impact of £400 million in BT’s current financial year, which runs to 31 March 2027, involving the purchase price and other costs.

BT stated TalkTalk had embarked on a prolonged but ultimately unsuccessful sales process for its operations and it took action after recognising the risk to the country, especially vulnerable customers and key public services “should the company collapse”.

The deal will bring BT 1.5 million retail customers and 1 million wholesale customers across the UK.

BT stated TalkTalk reported revenue of £1.2 billion and “was loss-making” in the last 12 months, but it is confident the company would become value accretive as the business is stabilised and synergies realised.

CEO Allison Kirkby described the situation as “genuinely unprecedented”, saying millions of citizens and businesses were at risk if TalkTalk had collapsed.

She said the acquisition was “the only viable option to keep millions of customers connected and supported”.

The deal faces an antitrust review given BT owns UK broadband company Openreach, which is a major TalkTalk rival.

However, the government has issued a Public Interest Intervention Notice due to the impact a collapse of TalkTalk could have on vital phone and broadband services.

The Competition and Markets Authority is to report its findings to the government by 19 October.

Stark warning
Kester Mann, director of consumer and connectivity at FDM CCS Insight, said the BT deal cements “a painful decline” of one of the UK’s most established broadband providers and its demise should serve “as a stark warning to any value-focused telecom provider”.

“With a clear value-for-money proposition, it should have been thriving amid continued concerns over the cost of living. But it failed to respond sufficiently to a fast-changing and increasingly competitive market, became burdened with debt following a buy-out in 2021 and regularly suffered with poor perception over service.”

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