The financial crisis at telecoms group TalkTalk poses a profound test of the will of Andy Burnham’s government to step in to protect vital services and vulnerable consumers.

It is astonishing that there is no supplier-of-last-resort regime in telecoms as there is for electricity and water.

For TalkTalk’s broadband clients, a bail-out would come none too soon. A family member, who works from home, found it impossible to arrange a transfer of his TalkTalk service on moving house earlier this year.

He shifted to BT Openreach’s network instead. That proved a challenge too when BT offered a confusing menu of network speeds, pricing and equipment, where the fastest offering, 60Mbps (megabits per second), weirdly appeared the cheapest.

As a challenger broadband supplier, TalkTalk, spun out of Charles Dunstone’s Carphone Warehouse, is a minnow among giants. 

It has had to compete against a difficult network ‘landlord’ BT, controller of the ducts, copper wires (now fibre) and exchanges.

The other wealthy providers are Vodafone and Virgin, part of the Liberty Global empire.

The superfast requirements of finance are supported by Goldman Sachs-backed CityFibre. Dunstone, a pioneer in British telecoms, took TalkTalk into private ownership in a £1.1billion deal six years ago. 

Being the first to market with Carphone and TalkTalk may have allowed Dunstone and his exuberant co-founder David Ross to accumulate personal riches. The business model has not proved durable.

With 1.5million subscribers, including the Ministry of Defence (MoD), TalkTalk is in a financial hole with net debt estimated at £1.2billion, despite injections of dollops of cash from Dunstone. Some 900 jobs are at risk.

Merging Dixons (renamed Currys) with Carphone in 2014 worked badly. Most Carphone stores were shut and Currys spent years running off uneconomic supply contracts.

TalkTalk is now in the last-chance saloon. Efforts to sell its wholesale operation Platform X Communications faltered and the group may end up in administration.

That could be the right solution were TalkTalk just a retailer, but it is a key telecoms provider with at least one client at the heart of Britain’s national security. 

Unlike the electricity supply industry, where some 51 firms collapsed into administration over the last decade, there is no formal safety net which obliges other firms in the sector to pick up the pieces.

Nor is there a special administration regime, as there is for the UK’s troubled water utilities.

The telecoms regulator Ofcom is regarded as among the nation’s more alert enforcers and over the years played a big role in requiring BT to let other players use its infrastructure on an equal basis to its own operations.

Ofcom has no legal obligation to act, but would ideally like to see a commercial solution. It is working in an advisory role

with Lisa Nandy’s Department for Culture, Media and Sport to come up with a solution.

BT, as a creditor, will want a say if a bail-out package is put in place. Dunstone may be the biggest personal loser.

Customers, including the MoD, and workers need protecting, and quickly.