A mobile broadband giant could be created by a potential merger

In the middle of tight operating conditions in the UK telecommunications sector there is rising speculation that T-Mobile and 3, who are currently rivals, could be merging.

Directly in the face of extensive lobbying from its shareholders T-mobile’s parent company Deutsche Telecom is thinking about the sale of the company’s UK division, according to a recent Financial Times report. The German government and the private equity firm Blackstone group are among these shareholders.

Based on the grounds that it would be a good fit strategically many analysts have said that 3 will be the most likely company to acquire T-Mobile. The mobile phone and mobile broadband network are already shared by the two companies and 3 doesn’t have its own 2G mobile network.

Rumours were fueled further when the finance chief at T-Mobile, Timotheus Hoettges commented that current competition affecting the UK mobile phone network was cut-throat at the company’s annual general meeting.

He 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.”

3’s already growing customer base would receive a dramatic boost and one of the largest players in the broadband sector would be created should this mooted merger go ahead. As its dongle sales hit more than a million in the early part of the year the company has seen a strong up-take of its broadband services. With its new range of broadband packages with laptops the demand is expected to be just as strong for months to come.

T-mobile’s mobile broadband services are, however, very popular with consumers, which has been shown by growing sale since the beginning of the year on a number of websites, despite any suggesting that the phone division of T-Mobile is not as healthy as its rivals. In a poll designed to gauge customer satisfaction in mobile broadband a YouGov study last year was named the top in five of nine categories.