TalkTalk pauses FibreNation sale after Labour reveals nationalisation plans

TalkTalk has put the sale of its full fibre broadband business, FibreNation, on hold after the Labour Party announced plans to turn broadband into a free public service.

The company’s half-year results were delayed on Tuesday as it was close to completing a deal for FibreNation, but the sale was paused on Friday after Labour announced plans to nationalise parts of BT.

“Not surprisingly, when news of that sort lands, everybody’s reviewing, pausing for breath, and considering what that means, and that’s what happened here,” chief executive Tristia Harrison told the PA news agency.

“We are in extremely advanced discussions and negotiations,” she added. “We’re just pausing and reconsidering.”

Ms Harrison said her team has been pleased with the level of interest in the business and is still speaking to several potential buyers, though she declined to name them.

The sale was paused after Labour revealed a plan to provide free broadband to British households if it wins the General Election next month.

Shadow chancellor John McDonnell plans to offer free internet to all households and businesses, and will commit £20 billion to increase speeds and ensure it reaches all parts of the company. It will bring parts of BT into public ownership.

“There’s a lot to consider, lots to digest, I think the whole industry is just considering what happens next; from our point of view we’ve been very focused on the (company) results,” Ms Harrison said.

In those results, TalkTalk revealed that more customers are plumping for its higher broadband speeds as it added nearly 300,000 new fibre accounts to the business over the last six months.

Almost a quarter – 23% – of TalkTalk customers chose a deal which gives them 80 megabits per second in the second quarter of the year, up from 17% in same period last year.

“A lot of what we’re talking about in the numbers today is about moving customers from copper to fibre, there’s no denying that the UK is behind on full fibre,” Ms Harrison said.

The 292,000 new customers who joined the broadband provider in the six months is a 52% increase on last year, TalkTalk revealed.

Revenue dropped 3.6% to £792 million. Meanwhile, the company swung from a pre-tax loss of £4 million into a £4 million profit.

The revenue fall came as the company quit a part of the mobile phone market.

In the past it had provided sim cards which used O2’s network; now its website links customers directly to O2 deals.

TalkTalk quit the market to focus on its broadband services.