A telecoms group that pioneered the supply of broadband by cables running through sewer systems is to be snapped up by Alchemy Partners, the private equity group, in a £70 million deal.

Geo, which is owned by Hutchison Whampoa, the Hong Kong-based conglomerate whose interests stretch from ports to telecoms, is one of a handful of companies offering fast internet access using sewers. It is expected to announce the sale as early as today.

H20 Networks, a Wales-based group, is in talks with councils in Bournemouth, Dundee and Northampton about laying fibre cables in the sewerage network.

The interest in new ways of delivering fast internet access comes amid fears about Britain falling behind other countries on its fast internet access.

Speeds in the UK are lagging far behind some European rivals. As broadband has taken off in Britain, so, too, has the variety of services available, but products that enable television and films to be downloaded over the internet are putting a strain on broadband infrastructure Companies such as BT say that the cost of introducing super-fast fibre networks across Britain could cost billions of pounds.

Proponents of installing cables in existing structures such as sewers argue that it is much cheaper than traditional methods and more convenient and environmentally friendly than digging up roads.

Hutchison, which also owns 3, the mobile phone operator, brought Geo in 2003. It merged the business with Urband, a London-based joint venture between Thames Water and the telecoms business of Lattice Group.

Geo supplies a wholesale service to companies such as Carphone Warehouse. Its management would stay in place under the new ownership.

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