Tesco considers sale of Dunnhumby big data analytics unit

Cost-cutting continues at troubled supermarket

Tesco could be on the verge of selling its big data analytics unit Dunnhumby as it continues to shed assets in an effort to generate cash.

A note from Tesco on its recent trading performance says it has appointed advisors to "explore strategic options" for the division. Tesco had been using Dunnhumby to monitor its supply chain to help identify areas for improvements.

However, it appears the firm believes the upfront cash value of the unit is greater than holding on to it for more gradual savings from the insights it provides.

The review of the business comes after it confirmed it had sold its broadband and voice businesses to TalkTalk in a straight cash deal. The value of the transaction was not revealed, although some reports quote a figure of £5m.

The deal means that TalkTalk adds around 75,000 broadband customers and 20,000 voice customers to its database, providing further economies of scale for its broadband network, the firm said.

TalkTalk explained that customers will be moved over to its systems in the months ahead.

Chief executive Dido Harding was upbeat on the deal. "The purchase of Tesco's broadband base is another example of TalkTalk leveraging its national network to grow faster," she said.

"We are excited about the future of quad-play - fixed phone and broadband, TV and mobile - and this acquisition will help to further drive home our value-for-money advantage."

The deal underlines Tesco's efforts to rid itself of assets outside its core supermarket business, after a somewhat disastrous 2014 that included hugely overstated profits.

Tesco has also offloaded its Blinkbox Movies business to TalkTalk, which will help TalkTalk fight against rivals such as BT, Sky and Virgin Media, which are all boosting the scope of the assets they can offer.

"Since launch TalkTalk TV has demonstrated its popularity with value-seeking customers to become the UK's fastest growing TV service," said Harding.

"We are excited about the opportunity that Blinkbox's platform and technology expertise bring, and which will significantly accelerate the development of our TV platform."

Adrian Letts, Blinkbox chief executive and co-founder, will join TalkTalk as managing director for TV.

The deal highlights yet more upheaval in the telecoms market after BT announced at the end of last year that it intends to buy EE for a £12.5bn to add mobile services to its portfolio.

That deal is still in the process of being negotiated but could be completed during 2015 and would make BT the largest fixed and mobile telecoms firm in the market, posing major competition to rivals including TalkTalk.