BT in discussions with Telefonica to buy O2

Britain’s BT Group is in early stage talks with Spain’s Telefonica on a deal to buy UK mobile operator O2, with two sources saying it has also begun negotiations with EE as it seeks a return to the British consumer mobile market.

Telefonica and BT confirmed they were in talks after Spanish website El Confidencial reported that O2 could be sold in return for a 20% stake in BT as part of a “strategic alliance” to strengthen the two groups.

BT also said it was in talks with another British mobile operator, which two sources close to the matter identified as EE, owned by Orange and Deutsche Telekom.