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TalkTalk eyes up Blinkbox for advanced FOURPLAY – report

With a £250m accounting hole, every little helps

Budget telco TalkTalk is reportedly pursuing a buyout of video-streaming service Blinkbox from Tesco.

In the manoeuvrings to provide mobile, internet, TV and fixed phone services, Blinkbox had looked to be a good move for Britain's biggest supermarket, but while Tesco Mobile has been successful for the retail giant, BlinkBox failed to deliver the goods.

According to the Financial Times, the two companies are currently locked in talks. And, in light of the losses BlinkBox has made, any deal struck between the pair is unlikely to be particularly valuable.

In the last set of accounts filed with Companies House, the vid-streaming service made a loss of £24.7m on revenues of £3.5m. Figures weren't included in the 2014 Tesco annual report, which promised that BlinkBox numbers would be published in future financials.

The supermarket has kept subscriber numbers secret, too.

There are, however, rival bidders for the service. Vodafone is building its quad-play offering and has previously been linked to BlinkBox. Securing content for online and mobile services has been a major challenge for all the telcos and is one of the reasons Telefonica may sell O2 and abandon the UK.

Tesco built Blinkbox by acquiring and merging the music streamer We7 and ebook retailer Mobcast. The company tried a service where customers who bought one of a number of DVD or Blu-ray movies in-store were given a free digital copy on BlinkBox. But take-up for this was poor.

Adding mobile to its broadband, TV and telephone services is the motivation for BT’s planned acquisition of EE, and – at the same time – we’ve seen Sky becoming more aggressive.

TalkTalk, which has a little 1800MHz spectrum, recently moved its MVNO deal from Vodafone to O2. It plans to roll out a national network using small 4G cells – although this is awaiting regulatory approval from Ofcom.

The sale of BlinkBox appears to be a sign that Tesco is looking to concentrate on its core biz, following an accounting error which overestimated profit by a whopping £250m.

The supermarket behemoth has already shelved its Hudl phone but it would be a shame if the widely praised Hudl fondleslab were to follow. ®

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