A takeover of the Deutsche Telekom-owned T-Mobile UK - reportedly worth between £2.5bn and £3.4bn - would catapult Vodafone, which currently holds 25% share of the UK mobile market, into a market leader, with a 40% share by revenue.
Currently, O2, which is owned by Spain-based communications giant Telefónica and is currently the largest UK mobile operator, has a market share of 27%. Vodafone is second, holding a 25% share, while France Telecom's Orange holds 22% of the market. T-Mobile claims 15% and Hutchison Whampoa-owned 3 has 8%.
However, a tie-up between the two giants could be blocked by competition regulators, with the UK's three other mobile operators likely to deem the move anti-competitive. The UK is the only major European market with five mobile operators.
Vodafone and Deutsche Telekom refused to comment.
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