O2 has put pen to paper on a 10-year deal with BT that will bolster its network infrastructure ahead of 4G rollout later this year.
BT has confirmed that it will build a "high-capacity transmission network" for O2, and offer backhaul links between existing mobile base stations and the new network, as part of the agreement.
Recent speculation had pointed to the two firms inking a 4G tie-up of some sort, but the finalised deal is a back end collaboration as opposed to the consumer-facing joint venture many were predicting.
"We won some excellent 4G spectrum just recently so it makes sense for us to explore the new opportunities that 4G presents. We have a strong position in the WiFi market and we are looking to build on that," BT said in a recent statement.
Pundits had previously claimed that O2 would do well to cozy up with an external party to beef up its next-gen network capabilities, after it walked away from Ofcom's recent 4G auction with only a small slice of high-frequency 2.6GHz spectrum.
For what it's worth, O2 said it was well aware of the challenges ahead but remained confident of being able to meet increased demand for high-speed mobile broadband - especially after agreeing terms with BT.
"With the UK's 4G spectrum auction complete, UK mobile data traffic is set to grow by more than 400 per cent by 2016," noted Adrian Di Meo, CTO at O2 UK.
He continued: "This is a huge opportunity for us, as well as a technical challenge. But through our partnership with BT Wholesale, customers of O2 will be backed by a high-performance mobile internet network which we believe will release the potential of 4G services and result in unrivalled mobile phone and internet browsing experiences."
O2 has said its 4G service will go live in Q3 of this year. Rival networks Three and Vodafone are also set to start rolling out 4G in the near future, while existing provider EE is moving to expand its operations.