Labour’s BT plans force Talk Talk to pause sale of Fibrenation
Broadband provider Talk Talk’s chief executive Tristia Harrison said that Labour’s plans to nationalise BT’s Openreach arm had forced the company to pause negotiations over the sale of its Fibrenation sister business.
On a call with reporters, Harrison said: “Negotiations are going very well, but the news overnight means that we are all pausing, considering and digesting what it means.”
Read more: Talk Talk back in black as City Fibre circles broadband arm
Earlier today Sky News reported that City Fibre, a Goldman Sachs backed alternative broadband provider, had been close to signing a deal to take full control of Fibrenation.
Instead, the signing will be delayed for at least a month. The announcement of the agreement was initially meant to accompany Talk Talk’s half-year results this morning.
The company said that it was in “ongoing advanced negotiations with interested parties.”
Talk Talk’s share price fell nearly four and a half per cent this morning on the back of the news.
The telecoms group launched broadband supplier Fibrenation last year as part of its ambition to build its own ultrafast network supplying three million customers.
Last night Labour unveiled the nationalisation plan as it promised to provide free full-fibre broadband for every UK household by 2030.
It also said it will nationalise “broadband-relevant parts of BT”, including Openreach (which runs much of the existing digital network), parts of BT Technology (which oversees the wholesale network), BT Enterprise (which sells broadband to business) and BT Consumer (which sells broadband to individuals).
Labour said the cost of part-nationalising BT would be set by parliament and paid for by swapping government bonds for shares.
Labour estimated that the policy would cost £20bn, but BT’s chief executive Philip Jansen took issue with the figure, warning the plan could cost more than £100bn.
Labour shadow chancellor John McDonnell is set to reveal the election policy later today.
Read more: BT CEO warns Labour’s part nationalisation of BT could cost £100bn
McDonnell will say: “This is public ownership for the future. Every part of this plan has been legally vetted, checked with experts, and costed.”
TechUK, an industry trade association, said that the policy would be “a disaster for the telecoms sector and the customers that it serves.”
City Fibre refused to comment.
Main image credit: Getty