FRANKFURT - Deutsche Telekom is in discussions with European telephone operators, including Vodafone Group, to sell its U.K. mobile-phone division, three people familiar with the talks said.
"Exiting the U.K. wouldn’t be a great loss for T-Mobile," said Joris Franssen, who helps manage about 400 million euros ($562 million) at Kempen Capital Management in Amsterdam.
Selling the U.K. unit would give Deutsche Telekom an exit from a market that has five mobile-phone operators and is more competitive than Italy with four and France with three. The unit, the U.K.’s fourth-largest, had the biggest drop in subscribers of Deutsche Telekom’s 16 wireless divisions last quarter. The company in May reported a loss after a writedown at the U.K. mobile-phone unit of 1.8 billion euros.
For Vodafone, Telefonica, France Telecom and Hutchison Whampoa, which operate mobile-phone services in the U.K., taking over or partnering with T-Mobile would remove a rival, allowing them to boost margins and earnings.