Not quite a “buy one get one free deal” by Tesco

Tesco’s ongoing woes may well be delighting a number of people who for a long time had complained about the firm’s massive expansion from UK grocer to a global multi product retailer during the course of the “nineties” and “noughties”. But the growth of discount retailers like Aldi and Lidl and the 2014 accounting scandal has resulted in Tesco working very hard to increase levels of profitability and refocus its energies on its core business, namely that of being a supermarket retailer. Early this year saw the completion of the sale of Blinkbox Music, the music streaming services provider Tesco had acquired for GBP 11m in June 2012.  Blinkbox Entertainment and Tesco Broadband were also sold in late January to TalkTalk Telecom, the UK consumer voice and data services company and it is TalkTalk who are now being linked as a possible purchaser of Tesco Mobile.

Press sources have linked Tesco and its bankers to discussions over the potential sale of the unit. Tesco Mobile uses the O2 network, so naturally O2 could be considered as a potential buyer, however the spanner in the works here is that O2 itself is currently in the process of being sold by its owner, Telefonica, the Spanish telecommunications company, to Hutchison Whampoa. TalkTalk Telecom, if interested in Tesco Mobile, would have to pay considerably more than the GBP 5m they paid for Blinkbox, but imagine the Clubcard Points that could be earnt on that!