Orange agrees BT deal to beef up broadband

The group – Britain's largest mobile phone provider after a recent merger with T-Mobile in the UK – will tap into BT's network in a move that will almost double its broadband reach and put Orange head to head with market leaders BT, Virgin Media and TalkTalk.

France Telecom-owned Orange said customers would stand to benefit as the arrangement would allow it to concentrate on its product offering and customer service. Households are also likely to see more price competition as the major players fight for customers in a hotly contested market.

An Orange spokesman said: "Whilst we have made massive improvements to our network over the past two years, with our new leadership position in the UK market, we don't just want to provide a good customer experience – we want it to be exceptional."

The firm is said to have spent hundreds of millions of pounds installing its own equipment in local exchanges in recent years, but is thought to have faced further significant investment to get the network up to scratch.

Its broadband network is currently believed to cover about 65 per cent of the UK population. BT will take on the group's infrastructure and integrate it into its own network as part of the agreement, while 61 Orange staff will also reportedly transfer over to BT.

Orange has nearly 30 million mobile phone customers in the UK after joining forces with T-Mobile, but has slipped behind in broadband with some 840,000 customers.

The group is understood to have had its broadband operations in the UK under review for the past ten months in light of the declining customer base.

Its deal with BT follows similar moves by other players, such as Hull-based telecoms group Kingston Communications, as they look to reduce the cost of maintaining networks.

Telecoms watchdog Ofcom recently unveiled proposals encouraging the use of BT's network by other providers to accelerate the roll-out of super-fast broadband across Britain.