O2, Vodafone Both Ponder T-Mobile UK Bids

Network providers O2 and Vodafone both appear to be considering bids to take over the ailing T-Mobile in the UK.

News floated around last week that Vodafone was considering a bid for the UK T-Mobile network, at the behest of bank Morgan Stanley. Now it appears that Britain’s biggest mobile company, O2, might also be joining the battle. 

T-Mobile is the country’s fourth-largest provider, and owned by the Deutsche Telekom giant, which is playing down the possibility of a sale and pointing out that fact that it’s just installed a new chief executive. However, it’s likely to need a fair bit of investment to gain traction in the British market. It’s estimated to be worth £3 billion, but T-Mobile paid £4 billion a few years ago for the license to run 3G services. 

Virgin Mobile uses T-Mobile as its network partner, but it has a deal that would let it move if T-Mobile is sold, which, surprisingly, could work to the advantage of any bidder, since it would help keep the deal out of the regulatory spotlight. However, it would also mean the loss of four million customers, which would lower the price.