O2 could be about to mount a counterbid for T-Mobile, following reports that the network is a takeover target for Vodafone.
News that Vodafone is considering acquiring T-Mobile, in a deal expected to be worth £2.5 billion, first surfaced earlier this week.
Were the acquisition to be approved by EU competition regulators, it could result in a new entity with 40 per cent of the UK mobile phone market.
However, it now appears that Vodafone could face a challenge to buy the telecommunications company, with the Guardian reporting that O2 is also considering bidding for the firm.
Commenting on developments, Emeka Obiodu, senior analyst at industry research group Ovum said that consolidation in the UK mobile phone market was inevitable due to the levels of competition present in the sector.
He told the Reuters news agency: "Everyone agrees consolidation is needed and seemingly T-Mobile will fall first.”