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Telefonica and Vodafone offer cash for T-Mobile

Vodafone Group Plc and Telefonica SA made informal offers to Deutsche Telekom AG to buy its T-Mobile UK unit for about £4 billion (US$6.6 billion), the Financial Times reported, without citing anyone.

Vodafone and Telefonica made the bids at the end of last month, while Deutsche Telecom is in discussions with France Telecom SA for a possible joint venture of their UK assets, the newspaper said on its Web site.

Taking over or partnering with T-Mobile UK, the country’s fourth-largest wireless operator, would remove a rival for Vodafone, Telefonica SA and France Telecom SA, allowing them to boost margins and earnings. Selling the UK unit would help Deutsche Telekom exit from a market that has five mobile-phone operators and is more competitive than Italy and France.

Subscribers to T-Mobile UK services fell 0.6 percent in the second quarter from the preceding three months, according to Deutsche Telecom, the company’s only mobile division to post a decline in users.

O2-owned Telefonica had a 27.7 percent share of the UK mobile-phone market on a revenue basis in the second quarter, followed by Vodafone’s 24.7 percent and France Telecom’s Orange with 21.5 percent, according to the Financial Times.

Vodafone and Telefonica are considering what kind of concessions they may need to make to obtain approval from antitrust regulators, the newspaper said.

Deutsche Telekom chief executive officer Rene Obermann on May 7 said he was taking a “long-term” view on the unit and that he backs the division’s “chances in the medium to long term.”
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