Summary
The T-Mobile Vodafone merger is unlikely but a better partner for T-Mobile could be found.
Analysis
While the FT has reported that Deutsche Telekom has appointed JP Morgan to advise on the strategic options for T-Mobile, I think that an imminent sale to Vodafone is unlikely on two counts. Firstly it is unlikely that Deutsche Telekom would not get a good price in the current recession. Secondly the United Kingdom Office of Fair Trading would refer the merger to the Competition Commission who view any combined market share of greater than 25% as sufficient to raise potential concerns regarding the effect on competition, and therefore they are unlikely to approve a Vodafone/T-Mobile merger, as the combined market share would be 40%. However, a 3UK/T-Mobile merger would only create a combined market share of 23% and therefore come under the Competition Commission's 25% market share threshold. 3UK and T-Mobile already have a network sharing agreement which would make the mechanics of combining the two companies easier
