UK fixed-line incumbent BT may return to the mobile sector as part of a joint venture with UK operators T-Mobile and 3, The Observer newspaper reported yesterday. The report claimed the three companies have held “informal talks” around areas such as branding, costs and revenue, but noted that discussions are at an early stage. BT exited the mobile business in 2001 following the demerger of its mobile arm, Cellnet (now O2 UK). However, BT is reportedly keen to re-enter the sector in order to take advantage of the migration of Internet services to mobile devices and to protect its core fixed-line business, which is under threat from products such as mobile broadband. In 2005, BT attempted to enter the mobile market via ‘BT Fusion’ – a device that used BT’s broadband network in the home and switched to Vodafone UK’s mobile network elsewhere. However, the initiative was wound down after two years due to weak customer demand.

Meanwhile, The Observer noted that T-Mobile UK – owned by Germany’s Deutsche Telekom – and Hutchison-owned 3 UK are keen on a deal that would strengthen their position in the UK, believed to be one of the most competitive markets in Europe. 3 has been struggling to make a profit and has long been viewed as a possible takeover target, the report said. The two mobile operators already have an existing relationship in place via Mobile Broadband Network Limited, a 3G network sharing joint venture.