Telefónica enters battle for T-Mobile

Telefónica, owner of O2, is understood to be the latest to enter the bidding war for Deutsche Telekom’s T-Mobile UK operations.

O2 campaign

It follows speculation that Vodafone has been eyeing rival T-Mobile, which if successful would see the combined company become the biggest mobile operator in the UK, surpassing O2

Currently, O2 has a market share of 27%, followed by Vodafone with 25%, then Orange with 22% and T-Mobile with 15%. The latter is estimated to be valued between £2.5bn and £3.4bn.

Deutsche Telekom has appointed JPMorgan to review options for the future of the underperforming UK business.

Some industry observers are questioning the short-term strategy of acquiring T-Mobile with many telecoms companies undergoing an industry wide downturn owing to the recession

Ovum senior analyst Steven Hartley adds: “It’s [T-Mobile] only just gotten a new management team. It makes sense for them [Deutsche Telekom] to at least give them a chance to turn it around.”

Meanwhile, France Telecom, owner of Orange, is understood to be considering forming a UK joint venture with T-Mobile.

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