Vodafone Plans T-Mobile UK Bid

Would create easily the country's largest telco.

So could Vodafone be about to swallow up the UK arm of T-Mobile?

That’s the news coming out of the Financial Times today and so far Vodafone has declined to comment. A takeover would make Vodafone far and away the country’s biggest network with a 40 per cent market share. It currently sits second with 25 per cent. O2 leads the way on 27 per cent, while Orange, T-Mobile and 3 are the next biggest players at 22 per cent, 15 per cent and eight per cent respectively.

Vodafone isn’t said to be put-off by anti-competitive regulators such as Ofcom since networks with such dominance already exist in France, Italy and Spain. The development also fits in with Vodafone CEO Vittorio Colao’s comments earlier this year that it was looking to consolidate operators. In February Vodafone bought 3 in Australia.

Similarly T-Mobile CFO Timotheus Hoettges admitted in May: “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.”

So everything balances up neatly – perhaps too neatly on the surface. Look deeper however and why would T-Mobile sell during a recession when the division which still remains profitable? Furthermore T-Mobile has a network sharing deal with 3 while Vodafone is tied in with O2.

There are still a few more wrinkles to be smoothed out in this one methinks…

via The FT

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