TalkTalk buys Tesco's Blinkbox and broadband services

It's been a long time coming, but Tesco has finally offloaded its loss-making streaming service Blinkbox. At the end of the last year, it looked increasingly likely that TalkTalk has positioned itself as the favourite to buy the service, and today the quad-play provider confirmed a deal has been reached. According to TalkTalk, Blinkbox's integration with its existing TV business will "begin immediately," with the benefits of the merger expected to show themselves by the end of the year.

Blinkbox wasn't the only thing on TalkTalk's shopping list, though. As part of its agreement with Tesco, the company has also picked up the supermarket's broadband and voice services, bagging an estimated 75,000 internet and 20,000 voice households in the process. Tesco says that by offloading those services it will reduce its £1 billion capital expenditure budget for the coming year, allowing it to concentrate on fixing months of negative growth.

However, today's deal stands to strengthen TalkTalk's position in the broadband and TV market, after Sky, Virgin and BT began consolidating their services in recent months. Of course, BT is still negotiating the £12.5 billion buyout of EE, which appears to have motivated rivals to invest more in their own services in the face of increased competition.