’s () broadband infrastructure subsidiary, Openreach is in talks with mobile phones giant PLC () about a joint investment in new ultrafast fibre-optic broadband for UK cities, according to media reports
The Daily Telegraph said the two companies are in what are described by industry sources as “early but serious” discussions about combining to build large-scale new infrastructure to replace ageing copper phone lines.
READ: More bad news for BT and Openreach as data shows UK broadband speed lags most of Europe
The paper said the cost of the proposed joint investment is uncertain, but could run into billions of pounds over time.
Openreach owns the pipes and telephone cables that connect businesses and homes in the UK to broadband and telephone network and provides regulated wholesale access to its network to BT’s rivals including , Sky PLC () and TalkTalk PLC ().
Under rules recently set by regulator Ofcom, BT must sell access to its network on equal terms to all retailers including its own consumer arm.
The Daily Telegraph said is understood to be demanding a period of exclusivity over any new infrastructure, however, to allow it to build its position in the market.
READ: BT shares gain after Ofcom forced to revisit rules on broadband market
At the end of last month, BT shares rose after the Competition Appeals Tribunal quashed rules set by Ofcom last year for a new market in so-called ‘dark fibre’.
Ofcom had ordered BT to introduce a dark fibre product that would allow its rivals to install their own equipment to send signals along fibre optics rather than paying to use that provided by the company’s network subsidiary Openreach.
The watchdog also cracked down on the services offered by Openreach, which is being legally separated from BT rather than spun-off as some rivals had been seeking.