BT Allegedly Explores Acquisition of Struggling UK Broadband ISP TalkTalk
A newspaper has claimed that telecoms giant BT (EE, Plusnet etc.) is allegedly in the “early stages of exploring a takeover” of debt-laden broadband ISP TalkTalk. The news follows only days after Openreach reportedly threatened to block the troubled internet provider from adding new customers (here) due to concerns over delayed payments.
Firstly, we’re going to assume that most of our readers are now fairly familiar with the roller coaster ride of events around TalkTalk, which last year secured a crucial refinancing package worth c. £400m (here and here) – saving it from the immediate risk of a default on its debts. Nevertheless, the ISP recently reported losing around 400,000 customers in the year (total of 3.2m) and, as above, has experienced a few disputes (here).
According to the Telegraph, BT is now said by “insiders” to be exploring the possibility of making a bid for the struggling ISP. The news comes amid fears that its own network access business, Openreach, could be damaged by TalkTalk’s financial challenges (Openreach holds around 3 million of their broadband base, with CityFibre accounting for c.150,000).
Advertisement
However, the report claims that BT has yet to formally propose such a bid to TalkTalk, which in any case would first need the nod of approval from both Ofcom and the competition regulator (CMA). But securing such approval would be extremely difficult and take a lot of time, not least due to BT’s own position as the market’s largest retail broadband provider and TalkTalk’s strong ties to rival networks.
The period of uncertainly all this would create might also risk accelerating TalkTalk’s problems by fuelling more uncertainty for customers. Suffice to say that we have our doubts about today’s new report, although there is little doubt that TalkTalk has plenty of problems.
Ofcom and the OTA do seem to have a limited Supplier of Last Resort (SoLR) process to help protect customers in the event of a big failure. But the reality is that not many ISPs, except BT, would have the available scale needed to rescue a base of TalkTalk’s size in a short space of time, and that’s before we get into the complexity of their wider supply chain arrangements with altnets etc.
As usual, neither BT nor TalkTalk have commented on the new report, which for now should be taken with a pinch of salt.
Advertisement
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
« As Funding Deal Looms, CityFibre Says Talk of Sale to VMO2 Unfounded
Advertisement
Leave a Reply
Privacy Notice: Please note that news comments are anonymous, which means that we do NOT require you to enter any real personal details to post a message. By clicking to submit a post you agree to storing your entries for comment content, display name, IP and email in our database, for as long as the post remains live.
Only the submitted name and comment will be displayed in public, while the rest will be kept private (we will never share this outside of ISPreview, regardless of whether the data is real or fake). This comment system uses submitted IP, email and website address data to spot abuse and spammers. All data is transferred via an encrypted (https secure) session.
I think it is becoming inevitable that TalkTalk will not exist much longer. Whether thats through the whole thing crashing and burning because of the ridiculous amount of debt it has, or by a major player in the market — such as BT or Sky — acquiring all of its customer base and migrating them to their own platform, its clear that the company has no real future in the long-term. By the end of the year, I expect that the customers will be moving to one of the bigger players.
I suspect that, in the event that TalkTalk has to be sold (whether by a provider taking customers or Ofcom’s “Supplier of Last Resort” process being actioned), BT would buy up the customer base associated to its Openreach network, and Sky would buy the CityFibre customers (due to the latter now having CityFibre packages).
Perhaps BT Retail should allow TT customers to remain on Cityfibre FTTP? After all, BT Retail insists its independent from Openreach (despite both being part of BT Group) so this in theory means its free to use any wholesale FTTP networks. Of course that’s never going to happen in a million years…
BT does already use non-Openreach last miles in the UK in some limited circumstances. That line has already been crossed.
@Pete Tong
CEO Alison Kirkby has already opened up the possibility of using other suppliers where Openreach does not install their own network so it’s not out of the question.
Would be a good purchase for BT, but what will BT do with the 150k customers on the CityFibre network?
Plusnet had many customers on LLU after the BT buyout and they continued to run the company at arms length for 10+ years before gradually migrating the base to OR.
Can’t see it myself, unless it was exceptionally cheap.
They’d be getting a customer base that is very “price conscious” to put it euphemistically. BT doesn’t need TalkTalk’s core network infrastructure or residual base of ADSL DSLAMs, and it already has its own headaches in closing down the PSTN the legacy EE/Plusnet broadband platforms. I can’t imagine they’d be enthusiastic about becoming a customer of CityFibre, no matter how temporary it might be. Integration costs would be colossal.
Ofcom might be receptive (from a continuity of service perspective), but would the CMA allow it?
@Ivor, more than a few things at play here and it is entirely possible that TalkTalk are dragging their feet on a number of issues which is holding, or could end up holding BT back.
1st off – not being paid. There’s more value in getting some income than non at all. The risk to BT isn’t the losses TalkTak have now, it’s the future losses of TT being unable to service their customers at all. So much is outsourced and those support contracts should be considered at serious risk too. BT can ill-afford an exodus of TT customers from Openreach by association.
2nd, there’s there massive exchange closure programme. BT will not want that getting held up, in particular where headend migrations are required. It’s all or nothing with those and ALL players off that headend need to be ready at the same time. Delays also impact any new entrants & the competition landscape around that time could be very different.
CMA – if push comes to shove, probably not much they can do but wave it through. There’s damage in the wider ecosysem and service continuity not just for residential but business is essential. This TT issue isn’t market failure, it’s TT misadminstration and it’s only their size and pretty clever gymnastics, which has kept them going this long. Someone is going to have to pick up the pieces. May as well do it in some salvagble way in a controlled manner rather than allow carnage.
Big boy conversations with opportunities to save face are probably the order of the day.
Mostly agree with BT Ivor, except the CMA as brown envelopes exchanging hands works wonders, so wouldn’t rely on that after what happened with 3 and Voda lol
BT don’t like value pricing, and much of Talk Talk customer base would leave if the BT price engine were to start milking them. Hell, they’ve tried so hard to degrade Plus.net that was highly successful before BT got their claws on them. And again BT Ivor is right about the ADSL/VDSL/PSTN side of TalkTalk.
Not suprised probably will be good for talk talk but what about the cityfibre deal ?
Best thing for it BT buy and shut it down and move all the long suffering customer to BT Broadband.
Then they will carry on suffering.
BT customer service is or was almost as bad as Talk Talk, Is BT CS still based in another country?
It has been based in on the UK for years and has regularly outperformed TT on service and Ofcom complaints measurements.
All BT customer service calls are answered in the UK
Yeah BT customer Services so good that when my mother’s FTTP had a RED light on the ONT, the woman at BT who was clearly at home with kids and dogs in background, insisted on connecting a BT router that had never been used, because a much better router is used, and didn’t get that RED light on ONT is BT’s side of the network and no router would make a connection. Eventually she discovered she couldn’t connect to the ONT 🙂
She then went on to deny they had 4G backup on their plan, even though we had direct email proof from BT!
Needless to say, come the revolution later this year when contract expires, BT will be duly dumped in favour of a CityFibre symmetric connection, using a wholesale ISP.
Just to be clear, BT call centres are based in the UK and Ireland.
Very interesting, not surprised at all as talktalk has been struggling for a long time. They failed to get on the train when everyone else started investing in FTTP instead they chose to look at altets like city fibre to reduce their costs and it has backfired.
They were early boarders of the train: search UFO Ultra Fibre Optic York.
Bit late for April 1st, ain’t it?
BT are supposed to be looking to expand the Plusnet brand and Talk Talk customers could be a good fit.
I agree, buying it under the plusnet brand makes more sense. BT’s “budget friendly” brand buying a budget friendly brand.
Would be interesting to see what they do with the Cityfibre subscribers couldn’t see that under the BT brand.
Wonder if AllPoints or Zen could be sniffing the idea too.
BT been killing Plus.net off bit by bit over the years, they just haven’t finally snuffed it out as customer numbers were still bringing in the money.
It will be extinguished as soon as they can to remove a cheaper player from market choice (and thus prevent choice for customers who flip-flop at end of contracts between providers to get the new customer price deals)
@anonymous
See Here:- https://www.ispreview.co.uk/index.php/2025/03/strategic-shift-as-bt-no-longer-being-ditched-as-uk-consumer-brand.html
Especially the line “The report also indicates that BT will “step up its investment” in Plusnet, which seems odd given how much they’ve gutted from that service in recent years”.
That’s pretty incoherent anonymous even by your standards.
They haven’t gotten rid of PN because it’s profitable, but they’re going to get rid of it to reduce customer choice even though it’ll cost them money as it’s profitable and they won’t be getting any of that segment of the market anymore. That what you’re saying? No actual benefit to BT mentioned or implied given the other brands aren’t budget providers, just giving up money out of spite for budget consumers who’ll all end up with Vodafone or whatever making money on volume even if the profit margin is small.
If they can make more money closing it they have a duty to their shareholders to close it down.
If they can make more money keeping it open they have a duty to their shareholders to keep it open and run it as efficiently as possible while keeping as many customers as possible happy.
They are nearly done folding it into their own platform which makes perfect sense: it’s not efficient running two networks and the Plusnet network is a legacy platform now. They are hiving off some value add services which also makes perfect sense, they did the same thing with their other brands.
They have at no point announced they want to close it down. They have invested resources in ensuring it keeps going.
On the wider point BT’s retail arms aren’t there to offer more choice to the market for lols they are there to make money. Same as every other ISP that isn’t charitable or a community business. If they aren’t operating on the same basis as every other ISP there is a problem that needs to be dealt with as the playing field is supposed to be level. Any complaints on this should be sent to His Majesty’s Government.
this could be a thing
Ofcom has a supplier of last resort process? Are you sure…?
Well, I suppose technically it’s via the Office of the Telecoms Adjudicator (OTA), although the two will aim to work together when facilitating it.
https://www.offta.org.uk/siteassets/ota/solr-industry-process.pdf?v=384772
There is also a universal service obligation imposed on BT, which ensures consumers are able to secure access to a minimum set of communications services at affordable prices if there are no other telecommunications services available. But that’s a bit different:
https://www.ofcom.org.uk/phones-telecoms-and-internet/information-for-industry/telecoms-competition-regulation/general-conditions-of-entitlement/universal-service-obligation
Any entity taking over Talk Talk will have to contend with the debt, it would be easier to let the business fall into administration and allow the Administrator to take control and carve out any valuable portions. Even in administration, the Administrator would have to pay the likes of BT and CityFibre to maintain service, so I’d expect it’ll be a bit of a firesale. Under administration it’d be easy to separate the Openreach and CityFibre customers and sell them as two separate entities. Whoever bought the customer base’s would have to be capable of quickly and economically migrating them into their own network’s. If BT are discussing Talk Talk, behind closed doors, it’s more likely about taking over the customer base following failure, rather taking on the whole company with associated debt, infrastructure and employee’s.
Sad end to a co that was revolutionary back when it launched a 40gb capped service and land line with discounted call charges back in 2007.
TalkTalk’s debt level is a significant obstacle to any potential buy-out. The current owners would want to minimise their losses, while shareholders of any business making an offer will want to avoid taking on that debt and pay the bottom price for what assets and customers will be of value or of high risk to them. Any such deal might become protracted as the investment funds are tough negotiators.
Regarding the suggested buyers; BT added GBP 1bn to its debt last year to complete the transformation of the business. Any extra debt and costs would impact its targets. Sky/Comcast would have little to gain at what would be a high price, while its own business is seeing its profits collapse. The Government should also be added to the list with respect to covering the costs of any White Knight. Government intervention, if it proved necessary, might impact funding of other telecoms schemes.
As of this afternoon, there does not appear to be an offer on the table. BT has not commented, nor has Ofcom. Rather than an offer, the major players may have taken a look to assess the risk to the continuity of service to existing customers of TalkTalk if it were to collapse, made at the instigation of Ofcom of higher up in the Government.
BT will be sniffing around to swoop in for the customer base but only at (or just before) administration. Migrate them across to Plusnet, you keep the riff raff off the main brand but get the customer base.
They could either migrate those on CityFibre across to Openreach (letting those go that can’t/won’t) or agree with one of the CityFibre providers looking for the customer boost.
This would (of course) make Plusnet amuch more interesting option for purchase by other operators when (if) BT ever get around to seling it themselves …
This would be a massive financial and operational challenge. BT would have to issue a lot of debt to pay for this, including dealing with TalkTalk’s debt pile, as BT has big commitments and isn’t flush with money. And as for customers: a mass migration would include getting ISPs including BT, Sky and others who are on Openreach and CutyFibre to collaborate with users being told which ISPs they have and carrying out the backend work to route services to the new ISPs.
Damned finger trouble on my last post, I meant of course getting all TalkTalk customers over onto BT’s systems.
Perhaps TalkTalk could stop wasting their limited money. I recently resigned into a 24 month contract with TalkTalk for FTTP supplied by CityFibre. I’ve been MORE than happy with TalkTalk and have only experienced ONE outage in the 12 months I’ve been with them. Thankfully, this lasted only approx. 6 hours and was actually a power-outage at one of CityFibre’s nodes. However, when I recontracted via live chat with TalkTalk, I was advised that a brand new hero pro 6 router would be sent out as part of my recontact. I advised the live chat agent that I did not need this as my existing eero pro 6 was working perfectly well. To which I was advised “I’m sorry, I have no way of removing it from the order”. Now, said replacement router sits under my stairs, unopened, gathering dust. You’re a fantastic ISP TalkTalk, but stop WASTING money!!
I recently switched from TalkTalk to BT as well I didn’t even know TalkTalk were having problems
The main reason TalkTalk are losing so many customers is that their routers have for years had buggy firmware. Talktalk have failed to acknowledge and address many of these bugs, inspite of more informed customers telling them what the issues are on the forum. Less tecchy customers get exasperated with their WiFi experience. They phone the helpline, but the staff there have no knowledge of firmware issues so cannot help the customer. So the customers leave. It’s a real shame as these bugs could be ironed out relatively easily and it would save all these fruitless phonecalls and unhappy customers.