BT inks deal to rescue embattled Talktalk

Broadband giant BT has acquired embattled telecommunications firm Talktalk, averting the collapse of the infrastructure that serves approximately 2.5 million customers. The FTSE 100 group confirmed on Monday that it purchased Talktalk and its wholesale arm, PlatformX Communications (PXC), from administration. The undisclosed deal is estimated to cost BT £400 million, accounting for transaction fees, working capital, a £60 million trading loss, and £100 million in uncollected Openreach revenues.

BT stated that the acquisition would provide immediate reassurance for Talktalk's employees and its 1.5 million retail customers, as well as 1 million wholesale users across the UK. Talktalk, the UK's fourth-largest broadband company, was founded in 2003 by Charles Dunstone as part of the Carphone Warehouse group. The company has struggled in the highly competitive telecoms market, with its customer numbers declining from a peak of 4 million in 2019.

Talktalk is currently reported to have debts of around £1.4 billion and has required several injections of additional funding. In March, the company announced £115 million in new facilities from its existing shareholders and lenders, consisting of £65 million in term funding and a £50 million working-capital facility. TalkTalk generated approximately £1.2 billion in revenue last year and was operating at a loss.

The firm employs around 900 people. BT's Chief Executive, Allison Kirkby, emphasized the unprecedented nature of this situation, stating that millions of citizens and businesses were at risk of losing their connectivity if TalkTalk had failed. She added that BT's acquisition of TalkTalk is the only viable option to ensure millions of customers remain connected and supported.

Kirkby highlighted that the immediate priority is to stabilize the business and provide a safety net for those reliant on TalkTalk.