Vodafone considering T-Mobile buy-out, says FT

Vodafone is considering putting in a bid for the struggling T-Mobile UK, which if successful would create the largest UK mobile broadband network by some measure.

Neither Vodafone nor T-Mobile have commented on the report which appeared in Sunday's Financial Times. The report, which cited sources "familiar with the matter", follows months of rumours about a T-Mobile sale. According to the FT it was first suggested over six months ago that T-Mobile UK's parent company Deutsche Telekom wanted to get out of the UK mobile broadband market.

Early last month, speculation began again when Deutsche Telekom dropped the value of T-Mobile UK on its books, which was considered a sign that it was looking to offload the troubled division.  At that time 3 and Orange were considered to be likely contenders for a buy-out.

Now, however Vodafone is in the frame, although with a 25 per cent market share, Vodafone could expect this kind of acquisition to attract considerable attention from industry regulators. If it went ahead, the deal would leave Vodafone with a massive 40 per cent market share, which is the sort of thing that's likely to upset Ofcom. The regulator is keen on maintaining a competitive market-place, and whilst until now the four biggest operators have had relatively equal shares of the action, a buy-out by Vodafone could upset the balance.