Troubled broadband operator TalkTalk has said it expects to be sold ‘imminently’ as fears that it could collapse raise national security concerns.
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it → say → concerns
The debt-laden company, which has 1.5million customers, said it was in ‘advanced discussions’ over separate deals for its consumer and wholesale businesses.
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it → lade → businesses
Speculation has swirled that the firm – Britain’s fourth-largest broadband provider – could go into administration unless a buyer is found.
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buyer → swirl → administration
The government has been in contact with TalkTalk over its future given its key role serving households and businesses as well as providing telecoms services to the Ministry of Defence.
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government → give → Defence
It is believed that national security networks are partly dependent on systems operated by TalkTalk’s PXC wholesale network – though the MoD is said to have contingency plans in place to ensure it is not reliant on just one provider.
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it → believe → provider
Customers are also reported to encompass more than 250,000 vulnerable households including elderly people with personal alarms.
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Customers → report → alarms
TalkTalk – Britain’s fourth-largest broadband provider – said it was on the final stages of a sales process
A source close to the company, which employs 900 staff, played down the idea that TalkTalk’s businesses might stop operating, saying that would not be the case.
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that → say → idea
In an update to investors, it said: ‘TalkTalk group is in advanced discussions regarding potential disposals of its PXC and TalkTalk consumer businesses.
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group → say → businesses
‘The company is now in the final stages of its sale process for the business and expects to conclude both transactions imminently.’
It is not known whether the TalkTalk brand will remain should the company be sold, though any buyer may wish to keep the well-known moniker.
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buyer → expect → moniker
It is hoped that a deal may be announced by the end of next week.
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deal → hop → week
Protracted talks over the sale of TalkTalk’s operations have already been ongoing, with rival Opus Broadband eyeing its consumer arm and Octopus Investments looking to buy wholesale business PXC, although a period of exclusivity with both bidders has now ended.
Opus has reportedly halved its offer for TalkTalk’s consumer arm to £100milion.
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Opus → eye → 100milion
Octopus is still in the running for PXC but Sky News reported London-listed Gamma Communications is too with a £200million offer.
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Communications → report → offer
The total proceeds of £300million for both would leave shareholders and lenders to the business facing steep losses on their investments in the business.
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proceeds → leave → business
TalkTalk was founded by Sir Charles Dunstone in 2003 as a subsidiary to mobile phone retailer Carphone Warehouse.
It was spun off and floated on the London Stock Exchange in 2010.
The firm has struggled amid an increasingly competitive market in recent years, with new challengers entering the fray and under-cutting many of the established providers.
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challengers → found → providers
Sir Charles, who is still a major shareholder in TalkTalk, backed a £1.1billion deal to take TalkTalk private in December 2020.
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who → back → December
He and lender Ares Management could yet still pump in more cash should other potential deals for the company fail to materialise.
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deals → pump → company
The sales are complicated by the fact the consumer business is dependent on infrastructure controlled by PXC.
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business → complicate → PXC
A deal to sell PXC would therefore be needed to secure the sale of the TalkTalk consumer business.
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deal → sell → business
Karen Egan, head of telecoms at consultancy Enders Analysis, told the BBC that TalkTalk, which had 4million customers in 2019, has become laden with debt and ‘struggled to invest’ in keeping them.
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which → tell → them
‘At the same time, the industry’s become incredibly competitive – a lot of excess market entry – and prices have collapsed,' she said.
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she → become → entry
Ms Egan said about £1billion of debt was likely to have to be written off as part of the sale process, which would be a ‘very large number for the banks to swallow’.
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banks → say → process
She added: ‘I’d be surprised if there’s actually real disruption for the TalkTalk customers.
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I → add → customers
If indeed this deal with Opus Broadband goes ahead they will take over the running of the operations I would expect.’
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I → go → operations
A Department for Digital, Culture, Media and Sport spokesman said: ‘This is a commercial matter and we do not comment on speculation.’
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we → say → speculation
Regulator Ofcom said: 'While we have no formal role in this process, we’re closely monitoring developments.'
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we → say → developments
The Aporia
