Vodafone and BSkyB in secret talks targeting BT broadband expansion

Vodafone and BSkyB are in talks to strike up a broadband deal designed to stall BT’s increasingly powerful position in the UK market.

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Secret talks between the two involve a collaboration that could include bundling Sky’s sports and movie offerings alongside a high-speed broadband service, reports The Sunday Times.

Any deal between the mobile operator and broadcaster would reportedly be signed to halt the progress at which BT has been encroaching on the strong position built up by Sky and Vodafone as both try to anticipate what BT will do next.

Alarm bells have been ringing at Sky for some time and began when BT managed to successfully bid for a lucrative package of Premier League matches and followed this up with a £900 million deal in November to show Champions League matches over the coming years.

On Vodafone’s side of the coin, it is reportedly becoming worried at BT’s potential encroachment into the mobile phone market after a deal it signed with EE could see the two work together to offer “quad play” packages. These bundles would include TV, broadband, home phone and mobile offerings across Europe and a similar tie-up between Vodafone and Sky would address concerns.

Vodafone was BT’s mobile virtual network provider [MVNO] up until October when BT opted for EE with rumours that EE’s 4G network was a particularly attractive lure when compared to the other bidders Vodafone and O2.

BT has been plunging cash into building an extensive high-speed fibre-optic broadband network across the UK with a £3 billion investment to deliver the service to 90 per cent of the UK by 2015, in addition to the £2 billion it has spent on sports broadcast rights.

Related: BT piping superfast broadband to rural homes in Surrey

Its growing strength in providing high-speed broadband to rural communities across the UK is another way it is successful extending its network and its competitors, namely Virgin Media and Sky, will be doing all they can to halt its growth.