Virgin Media O2 boss Lutz Schüler has asked the government to reconsider BT’s £400 million takeover of TalkTalk. In an open letter to Culture Secretary Lisa Nandy, he accused the deal of handing the keys to a dominant company and said it ‘makes a mockery of the market’.
Schüler accepts that TalkTalk’s 1.5 million customers needed immediate protection when the company entered administration. His argument is that keeping those connections running didn’t require the government to accept BT as their permanent owner. He wants other buyers and possible alternatives properly considered.
Nothing has changed for TalkTalk customers in the meantime. Contracts, prices, routers, bills and support remain as they were, while TalkTalk and BT continue operating separately. The Competition and Markets Authority is examining the deal and will report to the government by 19 October.
Image Credit: Virgin Media
Virgin Media O2 boss Lutz Schüler
Virgin Media has a point, and a motive
The competition concern is difficult to dismiss. BT already sells broadband through BT, EE and Plusnet, while owning Openreach, the network beneath much of the market. As we reported in our original investigation, the Financial Times estimates that adding TalkTalk will increase BT’s share of retail broadband customers from around 31% to 36%.
BT has also acquired PlatformX Communications, which supplies around one million wholesale connections. Virgin wants that part of the deal examined separately and says it could be sold to preserve competition. That matters to households because fewer independent suppliers behind the familiar broadband brands can eventually mean less choice and weaker pressure on prices.
Virgin isn’t an impartial observer. Its owners are trying to buy rival Full Fibre network Netomnia through their nexfibre business, a deal the CMA may block over its own competition concerns. Virgin therefore has every reason to challenge BT. That self-interest doesn’t make its central question disappear: why should an emergency rescue automatically decide who owns TalkTalk forever?
