Broadband giant BT has been forced to take over rival operator TalkTalk in a £400m deal following months of speculation over the fate of loss-making telecoms business.

Listed BT Group announced the takeover on the London Stock Exchange (LSE), stating it had acquired TalkTalk Telecommunications Limited out of the administration of TalkTalk Group on a debt free basis, with the deal costing £400m.

Administrators at Alvarez & Marsal said the sale would transfer all 900 employees of TalkTalk’s consumer and broadband business.

The government is understood to have intervened as much of the NHS critical patient support services used TalkTalk broadband to communicate with patients using the most complex home medical equipment such as dialysis and breathing machines. The collapse of TalkTalk would have been totally untenable.