Debt-laden British Telecom has received an offer for its local telephone wire network thought to be worth Stg£8 billion, it was confirmed today.
BT's local loop business, which provides the lines that link homes to the phone system, is subject to interest from a group led by the US asset finance group Babcock & Brown.
In a statement today, the consortium confirmed it had made an approach and that preliminary talks had already been held with BT.
A deal could cut the telecom group's debt mountain by almost half and ease pressure on BT to allow other telephone operators to use its lines.
BT declined to comment today, although it is thought the company may wait until it has demerged mobile phone division BT Wireless later this year before acting on the local loop business, which employs an estimated 30,000 people.
The announcement comes as it was reported that Sir Richard Branson intended to pit his Virgin business against BT in the new year.
The tycoon is quoted in the Independent on Sundayas saying that Virgin will "extend into the fixed-line telephony market next year".
If the deal for the local loop business goes ahead, BT would pay a fixed rental fee to use the lines, with the new owners able to offer the system to other phone and cable companies.
PA