After Vodafone emerged as a potential bidder for T-Mobile's UK operationearlier in the week, a bidding war now looks set to break out as reports emergeclaiming Spanish outfit Telefónica has weighed in.
Telefónica owns O2 in the UK,and according to the Financial Times, threw its hat into the ring afterrealising that a Vodafone T-Mobile alliance would knock O2 off the number onespot in terms ofmarketshare.
Deutsche Telekom is understood to have appointed JPMorgan toadvise on its options with regard to the future of its British mobile biz,after taking an impairment write-down of close to €2bn on the unit during Q1.
Meanwhile, a spokeswoman for Orangeowner France Telecom claimed the company was not interested in acquiringT-Mobile, but citing sources familiar with the situation the FT has said it maybe interested in a JV.
Any combination of the big four networks would haveundisputed market leadership in the UK, with well over 40% of thecustomer base sewn up.
Mark Hodac, a technology partner at law firm White & BlackLegal, said the UK mobilephone market was crowded compared to its counterparts in Europe.
"Consequently mobile phone companies are exposed to fiercecompetition domestically and are forced to operate at tight profit margins," heexplained.
"The mobile phone industry has not been immune to thedownturn and may well welcome [this] news on the basis that a reduction in thenumber of players in the market could allow the remaining operators to achieve healthiermargins," Hodac added.