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LONDON, Nov 15 (Reuters) - British broadband provider TalkTalk said on Friday that a deal to sell its FibreNation business had stalled after the opposition Labour Party announced a plan to create a "British Broadband" public service.
Labour's plan would bring part of telecoms provider BT back into state ownership if it won Britain's December 12 election.
TalkTalk said it was still in discussions with interested parties regarding its FibreNation business.
"Our discussions are very advanced, and yes, the news overnight of course is making everybody in the sector pause and consider," Chief Executive Tristia Harrison told Reuters.
"We were really close, really close, but I think something of this sort that is in the news, obviously everybody is pausing, considering, digesting and working out what it means."
TalkTalk launched FibreNation last year and said it would connect 60,000 more homes in northern England with fibre, underlining its ambition to build its own ultrafast network reaching three million customers after it abandoned a plan to team up with M&G Prudential.
Sky News reported that CityFibre Holdings nearly signed a deal to acquire FibreNation on Thursday.
Goldman Sachs-backed CityFibre has network projects in more than 50 cities, with the aim of connecting 5 million homes with fibre connections.
Broadband companies in the UK have been looking to take advantage of a plan pledged by Prime Minister Boris Johnson to "end the digital divide" through the rollout of full fibre broadband by 2025.
Labour's plan, announced late on Thursday, was not directly addressed by TalkTalk in interim results the firm published on Friday.
The group reported a 14% increase in like-for-like earnings before interest, tax, depreciation and amortisation (EBITDA) and reiterated its earnings outlook for the year.
"We're pleased that our clear strategy to accelerate customer growth in Fibre broadband while also reducing costs has led to a significant increase in profitability in the first half," CEO Harrison said in a statement.
Reporting by Alistair Smout; editing by Jason Neely