BT agrees rescue deal to buy broadband operator TalkTalk

The Competition Markets Authority (CMA) will need to approve the takeover, which would give BT greater power over the broadband market.

Tom Smith, a competition lawyer and former legal director at the CMA, said the regulator will be balancing that concern with other considerations.

“When the CMA looks at it, it will look at what would have happened if the deal wasn’t going through,” he told the BBC.

“If TalkTalk would have exited the market, for example, then really any deal is better than TalkTalk exiting, but then there might be alternative bidders as well that would have been less anticompetitive.”

However, the Department of Culture, Media, and Sport (DCMS) has given itself the power to make the final decision on the deal in the name of the public interest once the CMA has made its report.

DCMS has given the CMA until 19 October to deliver its verdict.

Culture Secretary Lisa Nandy said: “Phone and broadband services are vital national infrastructure.

“If TalkTalk services fail, there is a genuine risk to life and public services – including to hospitals, schools and emergency care. These are unprecedented circumstances that require action now.”

BT has said it will cost the firm £400m to buy TalkTalk.

This includes the amount needed to buy TalkTalk from administration, fees, TalkTalk’s £60m loss for this year, and BT effectively writing off the £100m TalkTalk owes BT’s Openreach business.