Vodafone set to bid for T-Mobile

T-Mobile UK is thought to have been put up for sale by its parent, with Vodafone emerging as the front-runner for a purchase that would create the biggest mobile phone company in the UK. It is valued at around £3bn, although it is one of the smaller operators in the UK with only 15 per cent of the market.

The biggest operator in the UK is O2, with 27 per cent, followed by Vodafone, which has 25 per cent. T-Mobile's major shareholders, which include the German government and private equity group Blackstone are understood to be keen to sell up.

Vodafone chief executive Vittorio Colao, who only took up the position last July, is known to be in favour of acquisitions, saying recently, "It is clear to me that there are a few markets around the world where consolidation would make sense and we are one of the leading players, so we have a duty to look at everything…"

Vodafone is the biggest operator in the world, with profits of £3bn, although recently it has been finding business tough and was forced to write down nearly £6bn last year.

While it undoubtedly has the financial muscle to push through a purchase, any deal would be subject to intense scrutiny by industry regulator Ofcom. However, with fewer players in the market in Europe and the economic downturn taking its toll on company profits, regulators might look more kindly on any deal at the moment.

Both companies declined to comment on the situation. ·