Virgin Media O2 (VMO2) has reportedly abandoned efforts to acquire rival UK broadband service provider TalkTalk at a valuation of £3bn, according to The Sunday Telegraph newspaper, with current economic conditions (capital is more expensive now that interest rates are higher), the valuation and regulatory uncertainty cited as the main reasons for VMO2 to walk away. As pointed out in July, when speculation of M&A talks between the two emerged, adding TalkTalk's customers and assets would have given VMO2 greater scale and helped its transition to fibre access technology, while also giving it a low-cost offer for consumers at a time when budgets are being squeezed. But now, it seems, TalkTalk may need to look elsewhere to fulfil its exit strategy.