TalkTalk has acquired Tescos broadband and fixed line voice services, along with its Blinkbox streaming video business for an undisclosed single payment.

Vodafone had previously been in talks with Tesco about acquiring the Blinkbox service after Tesco reported it had resulted in a £18.5m loss in 2013.

Last year, Tesco CEO David Lewis confirmed that if a new owner could not be found for the Blinkbox business, it would simply be shut down, labeling the streaming service a “distraction”.

However, the acquisition of Tescos broadband and fixed line services along with Blinkbox comes as a surprise to many, and is likely to be linked to Tescos recent financial difficulties and its efforts to streamline its business. The Blinkbox, broadband and voice services will all be integrated into TalkTalks existing business.

“Since launch TalkTalk TV has demonstrated its popularity with value-seeking customers to become the UKs fastest growing TV service,” said Did Harding, chief executive of TalkTalk. “We are excited about the opportunity that Blinkboxs platform and technology expertise bring, and which will significantly accelerate the development of our TV platform.

“The purchase of Tescos broadband base is another example of TalkTalk leveraging its national network to grow faster. 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.”