BT Wholesale has announced that it has been contracted to consolidate O2's mobile and fixed networks in the UK.
The five-year deal is a “multi-million pound managed services agreement,” BT said. Under the arrangement, BT will consolidate O2's core networks using BT's 21st Century Network platform.
BT Wholesale already provides network management for support for O2's mobile operations, and a managed network service for its business fixed and broadband portfolio.
The contract is significant because O2 plans to begin selling fixed phone services from next month, placing it in direct competition with incumbent BT, Rethink Wireless said.
But the operators share a long history, with O2 having been spun off from BT in 2001. The group was then acquired by Telefonica in 2006.
BT Wholesale is also rumoured to be in talks with UK phone retailer Carphone Warehouse, which is reportedly considering launching mobile and IPTV services and is looking for a wholesale provider.