(Adds reaction, background)
LONDON, Oct 4 (Reuters) - BT expects Sky to remain a
major wholesale partner for its full fibre network build, after
a media report said the pay-TV group was set to back Virgin
Media O2's fibre rollout, a person familiar with the situation
said.
The report in the Sunday Telegraph sent shares in BT down an
initial 8% in early trading on Monday. However the source said
that while Sky may keep its options open to take some volume to
Virgin, it was still expected to use BT too.
The shares were down 5% at 0822 GMT, the lowest since March.
BT has embarked on a major infrastructure programme, taking
fast broadband fibre to 25 million premises by the end of 2026,
in an expansion of its network that is offered to other
broadband service providers to upgrade the country's
connectivity.
Virgin Media 02, a joint venture that brought together
Liberty Global's cable network and Telefonica's
O2 mobile network earlier this year, is also upgrading
its network and has said there is an opportunity to enter the
wholesale market.
The Telegraph report said Sky was closing in on a deal to
become an investor in Virgin's broadband rollout. It did not
give any specific details on how the investment would work.
Analysts at Jefferies noted that the BT build was likely to
complete ahead of the Virgin plan and said there were strong
reasons for Sky, owned by Comcast, not to go with
Virgin.
(Reporting by Kate Holton; editing by Michael Holden and Paul
Sandle)