UK needs more powers to intervene when telecoms providers fail, minister says
Lisa Nandy tells MPs she is concerned about the sector’s ‘financial fragility’ in the wake of broadband provider TalkTalk’s near-collapse
A UK cabinet minister has said the government should have more powers to intervene in the case of failing telecoms providers, following the near collapse of broadband provider TalkTalk.
Culture secretary Lisa Nandy told MPs on Monday evening that she was “concerned about the [financial] fragility” of the telecoms sector, and that a “new approach to regulation” was needed to ensure there remains a supplier of last resort should companies fail.
Nandy’s call comes just weeks after she invoked an emergency protocol to enable her to override antitrust concerns over BT’s deal to buy its heavily indebted broadband rival TalkTalk, which regulators feared was on the brink of insolvency.
The move was prompted by concerns that a disruption to TalkTalk’s services posed a “genuine risk to life and public services”. The company has 2.5mn customers.
“There is nothing . . . that allows the government to intervene or to facilitate an intervention in that instance [if a provider fails and a new buyer can’t be found] . . . And I do believe that is a problem,” Nandy told a House of Commons legislative committee.
“Telecoms is increasingly important to the way we live, to our national security, to our energy infrastructure, to people’s lives and people’s livelihoods, and I think we do need a new approach to regulation in this area,” she added, responding to a question about whether she would consider introducing a provision to ensure a supplier of last resort.
The deal, which is pending final approval from Nandy, comes after years of financial difficulties for the Salford-based group.
TalkTalk, once part of Carphone Warehouse, has struggled after being taken private in a £1.1bn leveraged buyout in 2021. The deal, led by London-based hedge fund Toscafund, added £527mn of debt to its balance sheet.
The company’s near-collapse was the latest in a series of financial difficulties for UK telecoms groups this year. Many of these are so-called alternative network providers or altnets: dozens of small broadband companies which have raised over £31bn to compete with established players including BT’s Openreach.
However, the high cost of building out fibre broadband networks has saddled altnets with more than £9bn of net debt, according to estimates from Enders Analysis. The sector posted £1.5bn in losses in 2024, Enders said, as consumer uptake of services also fell short of expectations.
In January, London-based altnet G.Network was placed into administration, while rural provider Gigaclear was forced into a heavy writedown of its near-£1bn debt before lenders took control of the business.