Monthly phone has been about £18-22 per month for a few years, whilst broadband has been <£5 per month. Once you have the phone they're in profit, the cost of sending you a router has to be a few quid, paid for in the first month. I don't know what wholesale bandwidth costs but I can't imagine they can lose. They want you on broadband with them so that you don't move to another provider, it locks you in to their phone for 2 years [standard contract period in UK at the moment] securing them a profit.
Once you have the broadband they heavily push their TV packages.
Yes it's a race to the bottom but for POTS with broadband everything beyond your home socket to their servers is the same as with any other standard provider AFAICT.
They don't appear to do that much for their av.package x ~4.3 Million customers per month gross income; there should be considerable competition at the low end for what is essential a commodity.
WRT the review, I wouldn't use an ISP for my email provision but that's based primarily on lock-in; the company have https for their account pages and such (the Thawte cert is dated April 2014 FWIW).
1. https://paul.reviews/value-security-avoid-talktalk/