Debt-laden TalkTalk offloads customers in scramble to raise funds

Debt-laden TalkTalk offloads customers in scramble to raise funds

James Warrington

Sun, August 2, 2026 at 5:15 PM GMT+3 3 min read

• ARES +8.18%

TalkTalk has offloaded swathes of customers to a start-up rival as it scrambles to raise cash.

The deal to sell 120,000 customers to fledgling provider Rise Fibre marks the latest effort by the debt-ridden broadband provider to shore up its balance sheet.

Terms of the sale were not disclosed.

It comes as the broadband firm, which was founded by Sir Charles Dunstone, struggles under a £1.4bn debt pile.

TalkTalk secured a £115m lifeline from Ares Management and other shareholders, including £65m in fresh debt, earlier this year.

This was less than 12 months after backers were forced to provide a £235m emergency bailout to avoid a looming debt default.

The deal with Rise Fibre marks the latest whittling down of TalkTalk's customer base after it reached an agreement to sell 29,000 subscribers to Utility Warehouse for £5m earlier this year.

While the deals have raised much-needed cash for the business, they have fuelled questions over the prospect of TalkTalk finding a buyer for the remainder of its consumer division.

James Ratzer, an analyst at New Street Research, said: "The more these piecemeal customer disposals occur and the organic TalkTalk consumer base shrinks further, the size of the remaining base decreases further and will therefore continue to raise the question of whether it becomes possible to consider an acquisition of the whole of TalkTalk consumer."

TalkTalk is separately exploring a sale of its wholesale division, called Platform X.

VodafoneThree is understood to have tabled a bid for the division alongside several private equity firms. TalkTalk has previously said that the break-up will be completed by the end of summer.

However, figures released to investors this week show TalkTalk's underlying business is still struggling as it cuts back heavily on costs.

Revenues fell by 15pc in the first three months of the financial year to £292m as the company's retail customer base dropped to 1.6 million – down by a quarter on last year.

TalkTalk burned through another £58m in cash over the quarter, highlighting the strain on its balance sheet.

The financial pressures have previously caused TalkTalk to fall behind on payments to suppliers including Openreach, BT's network division.

Bosses were forced last year to secure a letter of credit from one of its lenders to guarantee £73m owed to Openreach.

However, TalkTalk said its interest bill was now lower after reaching an agreement with its lenders, while it had also cut spending thanks to cost-cutting measures.

The deal with Rise Fibre, which predominantly covers customers on CityFibre's network, will more than double the broadband challenger's subscriber base to almost 250,000.

The Manchester-based company was spun out of alt-net 4th Utility a year ago. It uses 4th Utility's network as well as those of rivals including BT's Openreach and CityFibre.

Rise Fibre, which is backed by the infrastructure arm of private equity firm CVC, has set out a target of reaching one million customers.

Steve Wilson, the chief executive of Rise Fibre, said: "This is far more than an acquisition. It marks another major step in the emergence of a genuine new challenger in UK broadband.

"We have ambitious plans to continue growing through further acquisitions and strong organic performance as we build the UK's fastest-growing broadband provider."

TalkTalk declined to comment.

Try full access to The Telegraph free today. Unlock their award-winning website and essential news app, plus useful tools and expert guides for your money, health and holidays.