Vodafone and Sky could team up to battle BT broadband dominance

BT has invested millions in TV and broadband, and rivals could merge to combat growing threat

Representatives of mobile operator Vodafone and Rupert Murdoch-owned BSkyB have held detailed conversations about how to halt BT's dominance in the broadband market.

Senior sources are said to have told the Sunday Times that the two British companies discussed how they could offer each other deals - with Sky offering its sports and movies channels to Vodafone customers, and potentially collaborating on a broadband service to rival BT's.

The firms have already collaborated with Vodafone offering Sky Sports Mobile TV as an add-on with its 4G service.

However, the sources said that it was unlikely that the two firms would seek to build a rival nationwide fibre network, because the investment would cost billions of pounds.

BT has already invested heavily to compete with Sky in the TV market, with the firm outmuscling Sky for '18 first pick' Premier League football games, as well as winning the rights auction to show all Champions League and Europa League fixtures from 2015 in a deal worth £897m.

Sky and Vodafone, which acquired telecoms firm Cable & Wireless Worldwide (CWW) in April last year, both offer fixed-line broadband services to customers which compete with BT's fibre network. The UK telecoms giant has been criticised by MPs for exploiting its "quasi-monopoly position" in the broadband market in the last year.

BT said that it "does not comment on rumour", while Vodafone and Sky also declined to comment.