Vodafone 'mulling bid' for Deutsche Telekom T-Mobile UK unit

LONDON: Vodafone Group Plc, the world's largest mobile-phone company, is considering a bid for T-Mobile UK Ltd, the British wireless unit of Deutsche Telekom AG, a person familiar with the situation said.

Newbury, England-based Vodafone may make an offer or form a joint venture, said the person, who asked not to be identified because the discussions are private. The deal would create an entity with about 35 million subscribers, or 50 percent of the UK mobile market. T-Mobile UK has an enterprise value of about $4.2 billion to $5.6 billion, the Financial Times reported yesterday. Deutsche Telekom's UK unit had the biggest drop in subscribers of its 16 wireless divisions last quarter.

"This would make Vodafone's competitive position stronger," said Joris Franssen, who helps manage about 400 million euros ($561 million) at Kempen Capital Management in Amsterdam, including Deutsche Telekom and Vodafone stock. "Fewer players in the market often means more stable pricing, which will make the business more profitable."