Ares Management warned that easing competition rules to facilitate BT's acquisition of TalkTalk could damage the United Kingdom's appeal to international investors. According to Sina Finance, the U.S. asset manager said in a letter to British government ministers, Ofcom, and the Competition and Markets Authority that the deal raises serious regulatory and competition concerns.

Ares also said the transaction could weaken investors' incentives to build UK network infrastructure and accused BT of using its supplier position to block an alternative bid from Ares and private equity firm Epiris. BT's Openreach is TalkTalk's most important network supplier, while BT also operates a retail broadband business.

BT announced on October 5 that it would acquire TalkTalk Telecommunications and PlatformX Communications from TalkTalk Group's insolvency proceedings without assuming the company's existing debt. The acquired businesses have about 1.5 million retail customers and 1 million wholesale customers, generated about 1.2 billion pounds in revenue over the past 12 months, and are loss-making.

The UK government has issued a public interest intervention notice under the Enterprise Act 2002, citing concerns that a sudden halt in TalkTalk's service could affect emergency calls, hospital and ambulance communications, medical alert devices, and other critical infrastructure. It has asked the CMA to report on competition issues by October 19, after which Digital, Culture, Media and Sport Secretary Lisa Nandy will consider broader public interest factors.