Vodafone and 3 cited in T-Mobile UK takeover dance

It’s been another weekend of rumours over the future of T-Mobile UK – with reports that Vodafone and 3’s parent company might team up to launch a bid for the troubled UK mobile division of Deutsche Telekom.

The Financial Times claims that the Newbury-based operator has been sniffing around its rival, said to be worth between €3bn and €4bn – and may be considering teaming up with Hutchinson Whampoa – the parent company of 3 – to launch a bid.

Even if Vodafone went it alone, the combination the two operators in the UK market would give a market share of 40%, according to the BBC. Such a large chunk of subscribers would certainly ring alarm bells with the UK Competition Commission and the higher powers of the EU in Brussels – although the BBC says it’s not uncommon for operators to have such dominance in other European countries such as France and Spain.

Vodafone are not the first operator to be linked with a bid for T-Mobile. Previous rumours of interest by Orange were vehemently denied a few weeks ago after a reported rebuffal by Deutsche Telekom, plus there’s still the distinct possibility of a ‘mega-operator’ plan involving 3, Skype and T-Mobile – which I exclusively wrote about back in May.

Whatever the outcome, one fact remains – being a mobile operator is no longer the equivalent to having a licence to print money. Vodafone are currently going through a £1bn cost cutting plan after it recently announced a 53.5% fall in annual pre-tax profits from £9bn to £4.2bn, and Deutsche Telekom recently wrote off €1.8 billion on T-Mobile UK.