Orange is understood to have made an offer for T-Mobile's British operation but has been rebuffed by the company's German parent, Deutsche Telekom, The Observer newspaper reports.
T-Mobile’s annual results, published early in May, revealed that the operator’s businesses in the UK, US and Poland were poor and there were calls by analysts to unload the ailing UK unit after it wrote down the value of the UK business to £3.3 billion.
Vodafone is also rumoured to have proposed swapping its Turkish business, which it has failed to turn round, for T-Mobile UK. This would give Deutsche Telekom a strong position in the eastern Mediterranean as it controls Greek operator OTE. This deal, however, has been denied by sources close to Vodafone, The Observer report adds.
The German government and private equity company Blackstone, both shareholders in Deutsche Telekom, have previously pushed for a sale of the UK business. The company’s management argue its new UK CEO, Richard Moat, should be given the time to improve its fortunes to avoid a selling at a knock-down price.
When Deutsche Telekom's financial results were announced in May, CEO, René Obermann, said the UK operation should be given a chance in the "medium term".