O2 & Orange Join Race to Buy T-Mobile UK

With Vodafone also heading the queue a deal now seems inevitable.

So T-Mobile may not want its UK business but it seems plenty of others do…

According to The Times, Orange has expressed an interested in the German giants British arm while The Guardian reports O2 is sniffing around as well. Any deal would be significant with analysts currently valuing the business at £3bn though that’s a whole £1bn less than T-Mobile splashed out on its 3G licence in 2000.

T-Mobile is owned by parent company Deutsche Telekom and back in May CFO Timotheus Hoettges admitted: “The British market is highly competitive and has comparably low margins. In our view consolidation is a means to take excess capabilities out of the market. Nothing is unthinkable on our side.”

A sale now seems likely – whether its imminent is another matter – and consolidation for the UK market would bring it in line with other European countries which tend to be dominated by fewer networks. With 3 also potentially on the menu (Vodafone bought 3 Australia in February) it could grow even smaller too.

That said, stepping into line with other nations may not be the best idea. Competition breeds competition and there is a reason Hoettges says there the UK is “highly competitive and has comparably low margins”. Fingers’ crossed after these potential takeovers this isn’t something we lose…

via The Guardian
via The Times

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