Any mega-deal with Telefonica would mark a U-turn by BT, which was forced to sell O2 - previously called Cellnet - in 2002 to help slash its debts
BT is in talks to buy mobile phone giant O2 - 12 years after selling it.
The telecoms heavyweight confirmed it had been approached by O2’s Spanish owner Telefonica.
However, BT announced it was also in negotiations with another network - believed to be EE - about a tie-up.
BT insisted all talks were at an early stage.
Reports say Telefonica could bag a 20% stake in BT in return.
Any mega-deal would mark a U-turn by BT, which was forced to sell O2 - previously called Cellnet - in 2002 to help slash its debts.
Telefonica went on to buy O2 for £17.7billion in 2005 but is now grappling with its own debt mountain, which bosses have targetted reducing to less than £34bn.
BT already has thriving broadband; landline and TV businesses but a deal with either O2 or EE would turbo charge its mobile phone ambitions.
BT is already working on plans using a combination of its own airwaves, in-home receivers that route calls over its fixed line network, wifi hotspots and fill-in capacity rented from EE.
In statement, BT said: “We continue to develop our own plans for providing enhanced mobile services to business and consumer customers, in line with our previous announcements.
BT's stock market value
£31billion
“We remain confident of delivering on these plans and have also been exploring ways of accelerating them, including assessing the merits of an acquisition of a mobile network operator in the UK.
“We have received expressions of interest from shareholders in two UK mobile network operators, of which one is O2, about a possible transaction in which BT would acquire their UK mobile business.
“All discussions are at a highly preliminary stage and there can be no certainty that any transaction will occur.”
More than £850million has been added to BT’s £31bn stock market value, after its share price jumped by nearly 2.8% following the announcement.
