Vodafone eyes T-Mobile buyout

Vodafone is considering a takeover of rival T-Mobile UK, FT.com has reported. T-Mobile is estimated to be worth €3billion- €4billion and an acquisition by Vodafone would mean the carrier would hold 40% of the UK mobile market with 35 million subscribers.

Vodafone, the world’s largest mobile-phone carrier by revenue, is reportedly understood to mulling over options either to make an outright offer or consider the creation of a JV with the Deutsche Telekom subsidiary.

Telefonica-owned O2 has the biggest share of the market at around 27%, followed by. Vodafone with 25%, Orange 22%, T-Mobile 15% and 3 languishing on 8%. The UK mobile market is one of the world’s most mature, with analysts predicting further consolidation amidst the economic crisis for the year ahead.

Speculation that Vodafone would orchestrate a merger with Hutchison Whampoa-owned 3 has been rising since the carriers announced the merger of their operations in Australia in February, winning the green light from regulators last month. However, Vodafone CEO  Vittorio Colao has intimated that he is open to consolidation opportunities across all operators.

Colao told journalists last month, “I don’t know if there is a three-way [merger], I don’t know if there is a two-way, I don’t know if there is a way at all — but 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. If things make sense and improves the conditions in the market, we will try our best.”

In South Africa Vodafone is also taking a larger stake in Vodacom Group last year acquired a took a stake in Poland’s Polkomtel SA.

JP Morgan has been appointed by Deutsche Telekom to investigate strategic options for the under-performing T-Mobile UK business.  Nether carrier has commented on the speculation.