Spain's Telefonica May Bid for T-Mobile UK

Spain's Telefonica(TEF Quote) may enter the bidding for Deutsche Telekom's (DT Quote) T-Mobile UK subsidiary, a report says.

Telefonica might make a move for Britain's fourth-largest mobile phone operator because of the prospect that its O2 unit could lose its top position in the U.K. if Vodafone(VOD Quote) purchases T-Mobile UK, according to the Financial Times.

The newspaper reported earlier this week that Vodafone, the world's largest mobile operator by revenue, is exploring an acquisition of T-Mobile UK, which has an estimated enterprise value of 3 billion euros to 4 billion euros ($4.2 billion to $5.6 billion).

O2's market share in the U.K. is 27%, while Vodafone's is 25%. A Vodafone acquisition of T-Mobile UK would boost its share of the U.K. market to 40%, the Financial Times reports.

Telefonica had no comment, but people familiar with the situation said the Spanish company was considering the case for bidding for T-Mobile UK. Its prep work on a bid was at an early stage, the newspaper reports.