BT has sealed a deal with the taxpayer-owned satellite operator OneWeb to tackle rural broadband blackspots, as it takes on Elon Musk’s Starlink.

Under the agreement OneWeb’s network of hundreds of small satellites in low orbit will be tested as a way to deliver fast and reliable internet connections to remote areas of Britain.

It comes as ministers press the telecoms industry to ensure broadband can be upgraded even in regions that are sparsely populated. In those locations it is challenging to justify commercial investment in new fibre-optic cables to replace aged copper telephone wires.

BT and OneWeb, which was rescued by the British government last year, will explore whether satellite connections could be offered to BT customers as well as to link up new mobile masts.

How low-orbiting satellites work

Mr Musk’s Starlink has launched more than 1,800 satellites and began providing broadband to early customers in the UK in January. OneWeb is aims to begin offering broadband to consumers by the end of this year,

Philip Jansen, BT chief executive, said the deal with OneWeb was “an important step” to understanding how operators could extend their services “to reach every corner of the country”.