Vodafone could become the UK’s biggest operator if it buys T-Mobile UK.

Vodafone is thought to be considering buying T-Mobile UK according to the newspaper the Financial Times – which would make it the UK market leader with a share of 40%.

The Newbury-based firm is interested in acquiring the telecoms operator owned by Deutsche Telekom, although there may be issues with the regulators blocking such a transaction.

Vodafone currently has a 25% share of the UK market, just behind current market leader O2 at 27%; T-Mobile has a 15% share. A combined Vodafone and T-Mobile operator would have a 40% market share in the UK, making it the biggest by some degree.

Although this would open up questions of competition, other large telecoms operators exist in France, Italy and Spain, so it could go ahead.

Deutsche Telekom, T-Mobile UK’s owner, has appointed JPMorgan to advise on the strategic options for the business after several years of under-performance. It has an enterprise value of between £2.5 billion and £3.4bn ($4.2bn-$5.6bn).

Vodafone’s Chief Executive Vittorio Colao, announced in November 2008 that the company was for the first time willing to play an active role in consolidation between operators, and in February this year, Vodafone and Hutchison Whampoa, the Hong Kong conglomerate, announced plans to combine their Australian mobile businesses.

The company revealed last month that nearly £6bn of writedowns had halved its full-year profits to £3.08bn, however it remains the world’s largest operator by revenue.

Shares in Vodafone rose 1.3% on Monday to 117.9p, while Deutsche Telekom was 0.8% higher at 704.9p. The paper said the two companies had both declined to comment.