www.WirelessFederation.com/news: Such a deal would leave Vodafone with 35 million customers and a 40% share of the highly competitive UK market where industry consolidation is thought to be long over due. It would leave the UK with four operators, similar to other big European markets.

Vodafone’s new chief executive Vittorio Colao has previously spoken about the company needing to identify acquisition opportunities. Although Vodafone has grown worldwide with some huge deals, it has been struggling to grow in the saturated home market, where its 25% market share trails O2’s 27%.

Deutsche Telekom, T-Mobile UK’s parent company, remains under pressure from its stakeholders to boost its operations, especially the UK division, where it reported an asset writedown of GBP1.8 billion earlier this year. It also hired investment bankers JP Morgan to advice on the best solution. T-Mobile UK has a 15% market share.

The proposed deal also poses many challenges. It will have to tackle a complex network-sharing deal as T-Mobile has tied up with 3 while Vodafone has signed an infrastructure deal with O2. France Telecom with Orange UK, Spain’s Telefonica and BT may increase competition through counter offers.

For more information, please visit www.vodafone.com