Virgin Media O2 nears deal to use BT’s broadband network, FT reports

Oct 30 (Reuters) - Virgin Media O2 is nearing a deal to use BT's BT.L fibre broadband network, the Financial Times reported on Friday, citing people familiar with the matter.

Here's what to know:

• Under the proposed deal, Virgin Media O2 would use BT’s Openreach network to serve new customers in areas not covered by its existing network, the report said

• Virgin Media O2 was also pausing efforts to upgrade its cable network to fibre as part of a broader cost-cutting programme, according to the report

• Virgin Media O2 and BT did not immediately respond to Reuters requests for comment outside regular business hours

• The report comes after Virgin Media O2's owners last week said they would challenge the competition regulator's opposition to their £2 billion ($2.67 billion) acquisition of fibre network operator Netomnia rather than offer remedies to address its concerns

• Nexfibre, a joint venture between Virgin Media O2's co-owners Liberty Global and Telefonica and infrastructure investor InfraVia, agreed in February to buy Substancial Group, parent of Britain's second-largest alternative fibre network operator Netomnia, to take on BT Openreach

• The companies said the deal would unlock about £3.5 billion of investment in the UK fibre market

($1 = 0.7481 pounds)