Vodas T-Mobile Bid Could Succeed, says Law Firm

A report in this mornings FT suggested that Vodafone was weighing up a bid for T-Mobile after T-Mobile UKs owner, Deutsche Telekom, appointed JPMorgan to advise on the strategic options for the business.

The report in the FT notes that any bid runs the risk of being blocked by the regulators, since the firm created would have create a 40% market share. But Mark Hodac, a Partner at technology and corporate law firm, White & Black Legal believes the mobile phone industry, which has not been immune to the economic downturn, may well welcome the news, on the basis that a reduction in the number of players in the market could allow the remaining operators to achieve healthier margins. Hodac adds that there are precedents for one company enjoying such a dominant position. He says:

“Whilst consumer groups will be concerned, it is by no means certain that regulators (in particular the European Commission) will block the deal, as circumstances already exist in other EU member states (Italy, France and Spain) where one mobile operator holds at least a 40% market share.

“Furthermore, our experience shows that network coverage is as, if not more, important to customers than pricing, and T-Mobiles customers may welcome the increased capacity for infrastructure expenditure that Vodafone (as the worlds largest mobile phone operator) could offer.

More news on the deal as we have it.