Job losses expected, as TalkTalk confirm plan to “demerge its main operating businesses” into three standalone entities
British Internet Service Provider (ISP) TalkTalk has announced major structural changes, as well as leadership changes, and upcoming job losses.
The veteran UK ISP on Wednesday announced that it will split into three standalone companies focused on business-to-business wholesale telecoms services; consumer broadband; and small businesses.
Additionally, CEO Tristia Harrison who has been in charge since 2017, will chair a new oversight board until the group legally splits on 1 March 2024, when she will become a non-executive director of the B2B Wholesale Platform.
“TalkTalk Group today announces a series of leadership changes as it moves to demerge its main operating businesses in order to create three standalone companies to drive their own strategic direction, growth and investment,” the ISP said in its announcement.
As a result of the separation, three entities will be created. The first is B2B Wholesale Platform, to provide wholesale telecom services in the UK.
The second entity will be TalkTalk Consumer, which will be responsible for 2.4 million residential broadband customers in the UK.
The third entity will be TalkTalk Business Direct, which serves the connectivity needs of approximately 90,000 small businesses.
TalkTalk said that Tom O’Hagan, founder of Virtual1 and current MD of TalkTalk Business Wholesale, will be CEO of the Wholesale Platform, while Adam Dunlop, the former Managing Director of iD Mobile and current MD of TalkTalk Consumer and Supply & Partnerships, will be CEO of TalkTalk Consumer.
Ruth Kennedy continues as Managing Director of TalkTalk Business Direct.
“The demerger will allow each company to focus on meeting the needs of their distinctive customer bases, eliminate operational complexity, and support balance sheet refinancing and investment on a standalone basis,” the organisation said.
The new companies will become operationally separate from 1 November 2023, and legally separate from 1 March 2024.
All three businesses will be headquartered in Salford, UK, but the changes “will lead to a limited number of redundancies, primarily from central corporate functions.”
TalkTalk is a veteran player in the UK market, and has long touted itself as a value-focused ISP, and it has an eventful corporate history.
TalkTalk was actually founded in 2003 as a subsidiary of Carphone Warehouse, and was demerged as a standalone company in March 2010.
During its long existence, the ISP was rated multiple times among the worst landline and broadband providers in the UK by Ofcom (due to the number of customer complaints).
Matters were not helped in this regard when it acquired Tiscali in May 2009.
That cyberattack cost the ISP more than £60 million in lost revenue and exceptional costs, as well as the loss of tens of thousands (said to be approximately 95,000) disgruntled customers.
The Information Commissioner’s Office also slapped TalkTalk with a £400,000 fine for its negligence in failing to ensure there was sufficient protection in place.
Over the years TalkTalk invested in its own local networks, and in January 2020, it sold its FibreNation (its fibre network in York) and TalkTalk’s shareholding in Bolt Pro Tem Ltd to CityFibre for £200 million amid reports of financial pressure to ease the entity’s debt burden.
In December 2020 shareholder Toscafund Asset Management sealed a takeover which valued TalkTalk at £1.1 billion.
That deal was completed in March 2021 and TalkTalk was taken back into private hands.
Now TalkTalk is to separate into three standalone entities, in another twist in its long corporate history.