Sky and Vodafone have reportedly holding 'high-level' talks with an aim to tackling BT's dominance in the broadband market.

The pair are thinking about partnering up in order to compete with BT which is investing more than £3bn on a high-speed fibre-optic network that is planned to reach 90 percent of homes by next year.

Sky and Vodafone have declined to comment on the situation but The Sunday Times cites 'senior sources'. The paper states that the two firm's might be plotting to offer Sky's sports and movie content plus collaborating on a high-speed broadband service to rival BT.

However, sources say that it's unlikely that the pair will spend several billion pounds on building a nationwide network.

Vodafone is currently offering customers free access to Sky Sports Mobile, or a free Spotify Premium account. Meanwhile, BT is holding a sale which means customers can get fibre-optic broadband for as little as £7.50 per month.

As well as broadband, BT has been making a splash in the sports market too. Not only has it launched its own channels with 18 top Premier League games, but has knocked £1.5bn from Sky's share value by winning the rights to show Champions League football.

The firm's two sport channels, along with ESPN, are free to broadband customers who can watch via a web browser, app or YouView TV box.

The firm is going from strength to strength and may even get back into the mobile game later this year. Last year BT dropped Vodafone as its mobile virtual network operator (MVNO) with EE as its replacement.