Tesco sells broadband and Blinkbox to TalkTalk

Ailing supermarket giant Tesco has confirmed that it has sold its fixed-line broadband and telephone business, as well as its video streaming service Blinkbox, to telephone and internet operator TalkTalk.

The move comes as part of Tesco’s plan to turn around its flagging fortunes after more than two years of falling sales and profits, and will continue despite a better than expected Christmas.

TalkTalk paid an undisclosed cash sum (although rumoured to be around £5 million) for the businesses, which will add 75,000 broadband users to the provider’s subscriber base, in addition to 20,000 landline customers.

Current Tesco customers will be migrated to TalkTalk over the next few months, as Tesco itself seeks to consolidate its core business functions.

TalkTalk Chief Executive Dido Harding said ‘the purchase of Tesco’s broadband base is another example of TalkTalk leveraging its national network to grow faster’.

‘We are excited about the future of quad-play – fixed phone and broadband, TV and mobile – and this acquisition will help to further drive home our value for money advantage’.

There have been rumours circulating for several months that Tesco planned to sell off its loss-making video streaming service Blinkbox.

Blinkbox – an on-demand premium service that operates across multiple devices and platforms, and can be accessed both inside and outside of the home – will see integration with TalkTalk’s current television services begin immediately, along with transfer of customers who will add to TalkTalk’s existing 1.2 million strong subscriber base.

In addition to gaining the service itself, Blinkbox Chief Executive and co-founder Adrian Letts will also join TalkTalk as their Managing Director for TV.

Until now, the operator has offered comparatively little premium television content with its service, TalkTalk TV, a package mostly aimed at Freeview users who want a small upgrade.

It has so far proved to be a successful venture, with more than 115,000 new subscribers added over the last quarter.

This acquisition, however, will allow the company to compete more strongly against rivals such as BT, Virgin Media and Sky.

‘Since launch TalkTalk TV has demonstrated its popularity with value-seeking customers to become the UK’s fastest growing TV service’ claimed Harding. She added ‘we are excited about the opportunity that Blinbox’s platform and technology expertise bring, and which will significantly accelerate the development of our TV platform’.

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