When is telecoms M&A in the public interest?
BT's TalkTalk acquisition raises the question, what's in the public interest. The proposed acquisition of TalkTalk by BT is fast becoming one of those stories where what seems to be the obvious answer to bailing out an ailing brand may not be a perfect or complete one. If you’ve been reading all the analysis in the last 24 hours, then you might also have concluded that BT’s decision to step in to rescue TalkTalk from administration with a £400m deal is understandable. TalkTalk has been struggling for some time, and the business has reportedly been unable to find an alternative buyer despite an extended sales process. Its long-term difficulties are well documented: declining retail customer numbers, cashflow problems, and a substantial debt burden. The business also operates in an intensely competitive broadband market, with ridiculous pressure on margins that are hard to remedy. So, BT stepping in and saving the day (and cash on the purchase value), is a sensible strategy for a brand that wants to grow its customer numbers and affirm its place in one of the world’s most complex and competitive telecoms markets. The intervention protects services for around 2.5 million customers and around 900 jobs, with continuity for customers who rely on broadband and voice services every day, including vulnerable customers and organisations providing essential public services. When a rescue risks restructure That really matters, as Culture Secretary, Lisa Nandy MP, made clear when she issued a Public Interest Intervention...
