BT is in discussions over the potential use of Oneweb satellites to help roll out broadband to the most remote parts of the UK.
The telecoms giant is in early stage talks to explore how satellite constellations could be used to beam internet services to rural areas that are too difficult or expensive to reach through cable networks.
BT is leading the rollout of full-fibre broadband as part of efforts to improve connectivity across the UK — an issue that has become even more pressing as a result of the pandemic.
But the project has been beset with regulatory hurdles and the industry has warned it is unlikely to meet the government’s target of full UK coverage by 2025.
A potential tie-up with Oneweb could enable BT to sidestep these issues and use satellite technology to deliver broadband to areas such as the Scottish Highlands.
However, a source with knowledge of the talks warned that satellite technology was untested at scale and said BT would explore as many options as possible.
A Oneweb spokesman confirmed the talks, which were first reported by Bloomberg.
“Oneweb would welcome the opportunity to support Broadband connectivity required to reduce the digital divide,” he added. BT declined to comment.
Any deal with BT would be a major boost for Oneweb, which is looking to get back on track after it was rescued from bankruptcy in November by the government and Indian billionaire Sunil Bharti Mittal.
The London-based company last month raised a further $400m (£294m) in fresh funding led by Softbank, taking its total raised to $1.4bn.
The firm is aiming to launch its first constellation of 648 low-orbit satellites by the end of next year.
But it is facing competition from Elon Musk’s Starlink, which has already launched roughly 1,000 satellites for its broadband network.