Speculation is mounting that rival mobile broadband providers 3 and T-Mobile could merge, amid tight operating conditions in the UK telecommunications sector.
According to a report from the Financial Times, T-Mobile’s parent company Deutsche Telecom is considering selling the UK division of the company in the face of extensive lobbying from shareholders. These include private equity firm Blackstone Group and the German government.
Analysts have named 3 as the most likely company to acquire T-Mobile on the grounds that it would be a good strategic fit. The two firms currently already share their mobile broadband and mobile phone network. Furthermore, 3 does not have a 2G mobile network of its own.
Timotheus Hoettges, the finance chief at T-Mobile, helped fuel the rumours at the company’s annual general meeting when he alluded to the cut-throat competition currently affecting the UK mobile phone market.
Mr Hoettges said: “The British market is highly competitive and has comparably low margins. In our view consolidation is a means to take excess capabilities out of the market. Nothing is unthinkable on our side.”
Should the mooted merger go ahead, it would create one of the mobile broadband sector’s largest players and would dramatically boost 3’s already-growing customer base. The company has recently enjoyed strong take-up for its broadband services with sales of its dongles hitting over one million earlier this year. Demand is also expected to be strong in months to come for its refreshed range of broadband with laptop packages.
Meanwhile, despite suggestions that T-Mobile’s phone division is not as healthy as those of rivals, its mobile broadband services are extremely popular with consumers as evidenced by growing sales via this website since the start of this year. Furthermore, in a YouGov study from last year the company was named top in nine of five categories in a poll to gauge mobile broadband customer satisfaction.
T-Mobile and 3 have declined to comment on the speculation linking the two companies.