TalkTalk has bought Tesco's online movie and TV service Blinkbox -- and will absorb Tesco broadband and landline customers onto the TalkTalk network too, as the supermarket sheds services and closes stores.
TalkTalk paid cash for the acquisition but won't reveal how much. Following the deal, around 75,000 broadband customers and around 20,000 fixed-line customers will be transferred onto the TalkTalk network in "coming months".
For more information on what that means for you, Tesco has published an FAQ on its website. You can contact Tesco Broadband & Homephone customer service by calling 0345 30 400 30 or emailing support@tescobroadband.com.
Today's acquisition does not include Tesco Mobile. A spokesperson says Tesco remains "committed to growing and developing" the mobile phone service, which runs on O2's network.
Blinkbox is an online movie and TV rental and download site, with users able to watch online or on their mobile devices. CEO and co-founder Adrian Letts will join TalkTalk as Blinkbox is folded into the broadband company's existing telly service, TalkTalk TV.
TalkTalk TV is based on the free YouView system and has over 1.2 million customers. Buying Blinkbox is set to help TalkTalk speed up development of new telly features, including a TV app to watch paid-for content across a range of devices. TalkTalk says the integration of Blinkbox is "expected to begin immediately" and the benefits of restructuring are "expected to flow from the end of calendar 2015".
"TalkTalk's move shows it's deadly serious about making its TV proposition a success," says industry observer Ewan Taylor-Gibson of uSwitch.com. "How it plans to integrate Blinkbox with YouView remains to be seen, although it's highly likely TalkTalk customers will still have to pay as they go for the Blinkbox content on offer."
Taylor-Gibson is optimistic about the change coming for Tesco's broadband and phone customers. "It's likely that existing Tesco broadband customers will be migrated over to TalkTalk on a good deal, to try and stop those who are not tied into contracts from leaving. However, Tesco has a certain amount of brand loyalty and, with TalkTalk's poor customer service record, there is a risk that people will end up switching anyway."
If you're not happy about becoming a TalkTalk customer, you should't be hit with a fee to make a vote with your feet. "If customers in a Tesco contract end up paying more for their monthly contract as a result of a migration to the TalkTalk network, they should technically be able to leave their contract without penalty," predicts Taylor-Gibson.
Tesco is on a cost-cutting drive since overstating its profit by £263 million last year. The supermarket chain will close its head office and 43 unprofitable stores, and has downed tools on 50 more stores currently under construction. It's unclear how many jobs will be affected.