Nigel Purdy, head of networks at telefonica O2 UK, said: "As we move to an all IP world and as data traffic volumes increase, the consolidation of our fixed and mobile core networks is a common sense approach that will help future-proof our business and provide the best possible service for our customers."
BT said that the consolidated approach will provide O2 with a platform to deliver a range of communications services to meet the needs of its customers and enable the company to reduce its capital expenditure.
BT Wholesale already provides a range of services to O2 including core network management support for its mobile customers and a managed network service that is enabling O2 to serve the UK business market with fixed and broadband services.
Brian Fitzpatrick, managing director of BT Wholesale Markets, said: "Our industry is witnessing a significant shift from commodity products to value-added managed services and this latest agreement with O2 is yet another example of how BT Wholesale is at the forefront of this industry transformation.
"The trend to outsource network requirements to BT Wholesale continues as operators look to stabilise their operational and investment costs, enabling them to concentrate on their customers."