The UK government’s endorsement of BT’s takeover of struggling broadband provider TalkTalk has raised concerns among investors and industry players about the future attractiveness of the country’s market to foreign capital. Bruno Candès, a partner at French infrastructure investment fund InfraVia, expressed worries that such government interventions introduce uncertainty that could deter investment in the UK broadband sector.

TalkTalk, which serves approximately 2.5 million customers, had been facing potential collapse before BT’s acquisition. The government backed the deal by reserving the right to override competition concerns, citing the risk posed to vulnerable customers if TalkTalk had failed. However, this move sparked strong opposition from competitors, who argue that it reinforces BT’s dominant position in the market.

InfraVia, which manages about £20 billion on behalf of investors and is directly involved in the sector through its partnership in Nexfibre—a joint venture with Virgin Media O2’s parent companies Liberty Global and Telefónica—warned that the government’s approach sends mixed signals to investors. This comes shortly after the Competition and Markets Authority (CMA) expressed reservations about Virgin Media O2’s proposed £2 billion acquisition of rival broadband provider Netomnia, warning it could lead to higher prices.

Candès highlighted the inconsistent treatment of these deals, noting that while Virgin Media O2’s attempt to acquire Netomnia faced regulatory pushback, BT’s purchase of TalkTalk was sanctioned despite competition concerns. He criticized the CMA’s provisional findings that CityFibre might have acquired Netomnia if not for Virgin Media O2’s failed bid, suggesting that relying on such alternatives that may never materialize is problematic from an investor’s perspective.

“This unpredictability risks making the UK uninvestable,” Candès said, emphasizing the need for clear, consistent rules rooted in economic realities to maintain investor confidence. He cautioned that if committed capital is withheld in favor of speculative possibilities, investors may turn elsewhere.

Virgin Media O2, which competes directly with BT, has condemned BT’s acquisition of TalkTalk as a “stitch-up.” Lutz Schuler, Virgin Media O2’s chief executive, has formally requested clarity from Culture Secretary Lisa Nandy regarding the government’s decision to intervene in favor of BT. The company is also calling for a regulatory review of the impact of the TalkTalk deal on competition.

Meanwhile, the CMA is expected to announce its final ruling on the Virgin Media O2-Netomnia merger by December 15, a decision that will further shape the UK broadband market landscape.