Tesco Broadband & Blinkbox sold to TalkTalk

Tesco store

Tesco has confirmed plans to sell off its broadband and video streaming service, Blinkbox, to network operator TalkTalk, as part of the ailing supermarket chain's turnaround strategy.

The company has also set out plans to sell the analytics business, Dunnhumby, underpinning its popular ClubCard loyalty scheme, and close 43 of its stores across the UK.

The majority of these closures are expected to affect the firm's high street outlets, rather that its superstores.

Further to this, the company has also shelved plans to open another 49 large stores, announced the closure of at least one of its HQs in 2016, and that Halfords Group boss Matt Davies will take over the running of Tesco's operations in the UK and Republic of Ireland fron June.

The news follows a turbulent couple of years for the retail giant, which has been a mainstay of the UK's shopping landscape since 1919 and boasts more than 3,000 stores.

The company's fortunes were massively hit in 2013 by the horsemeat scandal, which prompted sales to drop in nine of the firm's 11 geographical markets. This followed the firm issuing its first profit warning for 20 years in 2012.

Last year, the firm was also rocked by reports of accounting irregularities and the consequent departure of several of its top senior executives.

In light of this, the company has now embarked on a series of measures outlined in a trading statement released earlier today to steady the ship, including the disposal of its broadband and fixed line customer base to TalkTalk.

Dave Lewis, chief executive of Tesco, said: "We have some very difficult changes to make. I am very conscious that the consequences of these changes are significant for all stakeholders in our business, but we are facing the reality of the situation.

"Our recent performance gives us confidence that when we pull together and put the customer first we can deliver the right results."

The acquisition will increase the size of the respective customer bases for Talk Talk broadband and voice services by 75,000 and 20,000 households.

"As with the recent acquisition of the Virgin Media national base, customers will be transferred across to the Talk Talk network over the coming months," Talk Talk said in a statement.

Users of Tesco's Blinkbox service, which allows users to watch on-demand, paid-for television content, will be moved over to TalkTalk immediately.

As part of that portion of the deal, Blinkbox CEO and co-founder Adrian Letts will join TalkTalk as managing director for TV.

"The purchase of Tesco's broadband base is another example of TalkTalk leveraging its national network to grow faster. We are excited about the future of quad-play fixed phone and broadband, TV and mobile and this acquisition will help to further drive home our value for money advantage," Dido Harding, chief executive of TalkTalk, said of the deal.

Caroline Donnelly is the news and analysis editor of IT Pro and its sister site Cloud Pro, and covers general news, as well as the storage, security, public sector, cloud and Microsoft beats. Caroline has been a member of the IT Pro/Cloud Pro team since March 2012, and has previously worked as a reporter at several B2B publications, including UK channel magazine CRN, and as features writer for local weekly newspaper, The Slough and Windsor Observer. She studied Medical Biochemistry at the University of Leicester and completed a Postgraduate Diploma in Magazine Journalism at PMA Training in 2006.