Sky in talks with Telefónica over O2

Sky has approached Telefónica about a possible alliance with the Spanish telecoms group’s British mobile phone business, a move that would push the satellite group into the rapidly reshaping European mobile market.

The talks come as Sky’s major rival BT negotiates the acquisition of mobile operator EE, having decided against acquiring Telefónica’s O2. After that deal closes, Sky will be the only major UK broadband provider that does not also offer mobile-phone contracts.

Sky and Telefónica had been talking since late 2014, said two people familiar with the situation, although one added that the discussions had been happening alongside similar ones between Telefónica and Hutchison Whampoa of Hong Kong about combining their British mobile operations.

They said Hutchison Whampoa, which owns the Three network, indicated to Telefónica it could offer more than £9 billion for O2 UK before Christmas, although both added that the talks did not progress. – Copyright The Financial Times Limited 2015