Tesco Mobile is considering re-entering the UK broadband market, potentially leveraging its 5.8 million customer base to cross-sell services. The mobile virtual network operator, jointly owned by Tesco and Virgin Media O2, has held preliminary talks with Virgin Media O2 and Nexfibre about using their fibre networks.

The move would revive Tesco's broadband business, which it sold to Talk Talk in 2015 with 75,000 customers. Since then, Tesco Mobile has grown from 4.4 million subscribers in 2015 to its current size, attracting customers with competitive pricing and strong service. A broadband offering could integrate with the successful Clubcard rewards programme, offering incentives to attract subscribers.

Tesco's potential entry comes amid challenges facing the UK's fragmented broadband sector, where dozens of alternative network providers have struggled with high build costs and lower-than-expected uptake despite over £31bn in investment. Many smaller providers are experiencing financial pressure as the market becomes increasingly competitive.

Analyst James Ratzer of New Street Research noted that the crowded mobile market makes broadband expansion logical for Tesco. However, the company emphasized it currently has no broadband launch plans, stating discussions with partners are routine business practice.