TalkTalk buys Tesco Blinkbox & broadband for £5m cash

I’ve been watching the consumer broadband market as part of the development of the broadbandrating.com site. In this space size really is everything. Every day we perform sentiment analysis on the Twitter activity of all the ISPs we monitor – BT, Sky, Virgin, TalkTalk, Plusnet and EE.

It’s very noticeable that the levels of activity (ok complaints mostly) fall into three tiers. BT, Sky and Virgin get roughly the same number of tweets every day. Likewise Plusnet and TalkTalk at maybe a quarter of the above. Then EE typically get very few mentions.

Virgin and Sky get lots of complaints about TV problems. BT gets it in the neck I suspect because of Openreach. TalkTalk and Plusnet I assume “do well” out of not having as many TV customers (none in the case of Plusnet).

EE very much stand out as the smallest ISP by subscriber numbers in this cohort. At 750k subscribers last time I looked they lag behind everyone else who are in the several millions (note we don’t get to see any separately published data for Plusnet who are part of BT).

EE do get a ton of complaints on Twitter but they mostly concern mobile services – unsurprising considering EE are the biggest mobile operator in the UK.

Where is this conversation going?  It seems clear to me that this is evidence of the chances of success in the consumer broadband market being very much down to scale and also the ability to offer a full suite of services – triple play, quad play – call it what you like. This is why EE introduced a TV service. We can’t believe it’s doing that well or we’d see more talk about it on Twitter.

It’s also why TalkTalk have gone and bought the Tesco Blinkbox service. TalkTalk want to be up there with BT, Sky and Virgin getting more complaints about their TV services (not really but you get my drift – they want to be talked about because that will mean more people are buying their services).

It’s clearly also why Tesco have given up on broadband. If EE with 750k subs are hardly getting any exposure, other than what they pay for, then Tesco with 75k customers stand no chance. You might ask why they even bothered with the Blinkbox service in the first place. Tesco are up against the big boys in the broadband game and now it’s game over.

Outside the big ISPs mentioned here there are a number of other smaller operators that sell to consumers. These guys very much sell on service and quality of their product and tend not to have a TV play. There could well continue to be a place for them (I’m not mentioning any names although I wonder how long the Post Office will stick at it) but the market is increasingly going to be driven by bundles that include TV and very soon mobile.

I’ll finish with the vision of TalkTalk CEO Dido Harding turning up at a Tesco checkout with 75k broadband subscribers and the Blinkbox business in her shopping trolley. She hands over £5m cash and presents her Tesco Clubcard. That should get her 5 million Clubcard points. Had she been able to pay with her Tesco Clubcard Master card the could have doubled the points. Unfortunately Tesco only let you have a credit limit of around £7k or so that must have discounted that possibility:).