BT agrees to buy TalkTalk for £400m and retain 900 jobs — The Guardian
In the United Kingdom, BT has agreed to acquire broadband internet provider TalkTalk, which is under external administration, as well as its wholesale division PlatformX Communications (PXC). The debt-free deal could cost BT around £400m and provides for the retention of 900 jobs, The Guardian reports.
If the transaction is completed, around 1.5 million TalkTalk retail customers in the UK will join BT. Administrators Alvarez & Marsal Europe said that all 900 employees of TalkTalk's consumer and broadband businesses and PXC would transfer to BT.
Regulatory review
The transaction will be subject to review by the UK Competition and Markets Authority. Digital, Culture, Media and Sport Secretary Lisa Nandy initiated a public interest intervention after the deal was confirmed. It is intended to ensure an assessment of the transaction's potential impact on public health, critical infrastructure and the provision of services to vulnerable customers.
TalkTalk serves approximately 250,000 vulnerable customers. Thousands of them are elderly people or people with disabilities who use telecare devices connected to the old copper network. The PXC wholesale division has around 1 million customers, including service providers for the healthcare, emergency services, defence, education, transport, banking and public-sector sectors.
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Nandy will be able to consider broader public interest issues after the competition regulator provides its opinion by 19 October on potential competition concerns. Until the review is completed, BT and TalkTalk will operate separately and continue to compete, BT said.
Competitors' reaction and TalkTalk's financial position
Virgin Media O2, which also explored the possibility of buying TalkTalk, criticised the agreement. The company said the deal could strengthen BT's dominant market position. According to Enders Analysis, BT's share of the UK broadband market is about 30%, while BT-owned network operator Openreach is TalkTalk's largest supplier.
BT expects the transaction to have a cash impact of £400m in the current financial year. This amount includes deal and administration costs, working capital requirements, a £60m trading loss and £100m in unpaid Openreach revenue.
TalkTalk's number of retail customers has declined from around 4 million in 2019 to 1.5 million this year. Over the past 12 months, the Salford-headquartered company generated around £1.2bn in revenue but remained loss-making. BT chief executive Allison Kirkby said that nothing would change for TalkTalk customers for now, and that no decision had yet been made on retaining the brand.
