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Sky has contacted Telefonica - the parent company of mobile broadband provider O2 - over the formation of a possible alliance in the UK market, it has been reported.

According to the Financial Times, the two parties have been in discussion since late 2014 over a potential tie-up agreement, which would give Sky 3G and 4G capability.

Should BT's takeover of EE go ahead, it would leave Sky as the only major UK broadband provider that doesn't offer mobile services; an issue Sky is looking to address.

Naturally, Sky is eager to keep up with its main rivals, by introducing quad-play broadband bundles featuring mobile broadband, calls and SMS services.

However, the news provider said it is unlikely Sky will mount a full takeover bid for O2.

The satellite firm has recently undergone a major European expansion and already has a significant debt pile to manage.

Sky is believed to favour a broad partnership agreement, which combines its own fixed-line and pay TV businesses with O2's 3G and 4G connectivity.

A deal could involve shares rather than cash, giving O2 a stake in Sky.

Back in March 2014, Sky paid £200 million for O2's fixed-line business - and its subsidiary Be Broadband - acquiring 400,000 home broadband subscribers in the process.

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