TalkTalk Attempting to Sell UK Consumer and Wholesale Business Again
The heavily indebted TalkTalk Group has reportedly begun the process of hiring City advisers – with both Barclays or Morgan Stanley said to be in the frame – in order to oversee the possible breakup and sale of their consumer broadband arm of the same name, and their PXC wholesale division.
The provider, which in the last month or so has been in the news several times due to alleged disputes with suppliers over payments and fees (here and here), is reportedly said by Sky News to now be in the process of launching a Strategic Review of its business after separate “unsolicited approaches” were allegedly received for both parts of the group.
The group has certainly had a rough few years and in September 2024 secured a crucial refinancing package worth c. £400m (here and here), which saved it from the immediate risk of a default on its debts (extended debt maturities to September 2027). But it’s still in a difficult position and recently suffered another round of redundancies (here), as well as the continued shrinking of its customer base from 3.6 to 3.2 million customers over the past year (here).
Advertisement
On top of that, Openreach was recently said to have “threatened to block TalkTalk from putting new customers on its broadband network,” which we assume would only be enacted if the same problem with late payments were to continue in the future. Suffice to say that the group have long been attempting to sell off their remaining businesses, albeit so far without all that much success.
The latest development suggests that the provider, which declined to comment on the new report, might be close to finding a suitor for TalkTalk’s consumer broadband business and / or their PXC wholesale and networks division. But it remains unclear whether the recent approaches can be converted into a deal, or what form such an agreement might take.
Sky also suggested that TalkTalk was in talks to raise a further £100m from a combination of existing investors and asset sales. The latter of which could involve the sale of their remaining 3.2 million broadband customers, or at least some of them, to a new owner.
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.
« Study Claims UK Broadband Speeds Slow by 27 Percent During Heatwaves
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 and display names can be almost anything you like (provided they do not contain offensive language or impersonate a real persons legal name). 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.
Just sell already, talktalk needs to learn how to let go.
Darn it, had I known then I would not have spent all my money on buying Poundland last week.
Talk talk are desperately to sell
I don’t see a huge business rationale for selling other than necessity for short term cash needs.
Selling inevitably means selling for a bad price given the buyer has more power in the negotiations.
I’d love to see what the end goal is here for a viable turnaround strategy.
So far it seems like simply selling parts of the business off and in effect reducing the ability to ever make enough money to clear the debt.
just wait for them to go bust, buy the assets for peanuts and the debts have vanished.
With the debt they have they are not very attractive. The only real value is the customer base
I wonder if BT are still in the frame? After newspaper speculation a short time ago.
Think that’s the ‘separate “unsolicited approaches”’ which the article alludes to.
Over a decade ago I was very happy with an Isp called nildram. No fuss, good service and 1 month contract. Then piped bought them but still good service. Then tiscali bought them and they managed to reduce my ADSL line to 64k rather than 2M. Just sign up for 12 months and we’ll help you. Then talk talk bought them. That’s tldr but if your customers aren’t happy then your shareholders won’t be
I was there when Tiscali had the bright idea of buying Pipex for £200m. Unfortunately it’s cost around £40m and some tears to consolidate all the different brands like Nildram, Freedom2Serve etc as well. Two years later TalkTalk brought Tiscali for £200m…. Work that one out.
Ha! This is funny to read. So TalkTalk who have been trying to break up / sell itself off for some time now is going to have another bash at it.
So they “sold off” TalkTalk Business to themselves after all other interested parties (the ones who could add up) ran a mile. Their numbers don’t add up. Their auditor quit on them. The equity company who were meant to buy into their wholesale arm also did a runner.
But then the people at the top have done well. They got their titles. The ‘Sir’ at the top accepts no responsibility for every bad decision made (and continue to be made) under his watch. Even the “bailouts” are just a reinvestment of the monies taken out in 2021.
The ‘Dame’ has moved on. No longer associated with the company. The sad thing is, it’s the employees and their partners who will be the ones who bear the brunt of whatever is coming next.
Hopefully the senior leaders at TalkTalk will be remembered for what they’ve done.
It is reported [1] that more than half of BT’s lost “broadband lines” in the last financial year were due to customers lost by TalkTalk.
The same article suggests that TalkTalk’s payments are worth about GBP 1bn per annum to BT.
BT may have considered an acquisition of the consumer division as a defensive move, but would such an acquisition stem the problem, and how much would it cost? It would also involve BT having to pay CityFibre for the connections used by about 30pc of TalkTalk’s customers. Would BT be prepared to let that continue? If not, how much would the feasible network migrations cost?
And then there are the details of the existing contracts.
[1] BT faces fresh pressure as TalkTalk payment issues raise financial and operational risks
https://www.proactiveinvestors.co.uk/companies/news/1072610/bt-faces-fresh-pressure-as-talktalk-payment-issues-raise-financial-and-operational-risks-1072610.html
Lost lines? You mean, people leaving the Openreach network because they left Talk Talk.
I managed to talk a couple of people to leave Talk Talk and change to the Alt net that is here, they are so grateful. 🙂
I feel for the people who will lose their jobs, because who ever buy them up will get rid of people, that sadly happens all the time.
@Ad47uk: If a TalkTalk customer migrates to another provider and their service was provided via Openreach, then yes BT does lose the benefit. The figures are available if you want to take a look.
Seems pretty presumptuous of them to assume every TalkTalk churn was to an altnet. Some would’ve been to another Openreach supplier, would’ve even been some TT over CityFibre churn to Openreach.
@Polish Poler: The article is referring to nett figures except in the case of the projection of future losses.
Aren’t Talktalk also investors in home telecom, telecoms acquisition group or whatever they’re called this week? I wonder if those users are at risk or would they be under their wholesale provider?
Arguably, their wholesale side could fare better than their consumer side as behind the scenes, they had some higher end ISPs for a while.
Home Telecom have an informative graphic on the “about” page.
The wholesale / PXC division has TT Consumer as the anchor customer. If BT or VM02 were to buy the consumer base, they would move the customers to their own infrastructure. Means PXC has limited value to anyone other than if you want to deal with 3,000+ unbundled exchanges and undertake the consolidation as being driven by Openreach’s exchange exit plans.
I don’t see PXC being bought by BT (for regulatory reasons) or VMO2 (regulatory reasons and they have a lot on their plate anyway). Far more likely is that private equity firms or infrastructure investors would be interested as they have the money to buy and see PXC’s aggregration business as the perfect complement to their existing altnet holdings. For example DigitalBridge has stakes in Netomnia and YouFibre), Macquarie (KCOM, Voneus), Infracapital (Gigaclear).
Another potentially big loser from a full or partial sale of TalkTalk operations would be CityFibre.