London: Shares in Vodafone Group PLC rose Monday after the Financial Times reported that the cell-phone giant is interested in buying T-Mobile UK, the British unit of Deutsche Telekom.

Vodafone spokeswoman Libby Pritchard said the company would not comment on the front-page report from the Financial Times, which did not name any of its sources. Deutsche Telekom and T-Mobile also declined comment.

Vodafone shares led the London Stock Exchange higher, rising 0.9% to 116.7 pence ($1.93, €1.38) in midmorning trade.

Britain’s cell-phone market is the most competitive in Europe with five major operators. Vodafone, currently second behind O2, would leap into pole position if it acquired T-Mobile.

Telefonica-owned O2 currently has a 27% market share, Vodafone 25% and T-Mobile 15%.

Telecoms analysts said a Vodafone deal for T-Mobile would make sense because the cut-throat competition among five companies has made profits for any of them particularly hard to come by in Britain. The market includes France Telecom’s Orange with 22% of customers and Hong Kong’s Hutchison Whampoa with just 3%.

The Financial Times said Deutsche Telekom has already appointed JPMorgan to explore potential suitors for offloading T-Mobile, which has struggled for years to perform as strongly as its German parent.

“Given that similarly dominant players exist in France, Italy and Spain, the UK regulators might let this one through,” said Manoj Ladwa, senior trader at ETX Capital. “Expect some volatility in UK telco stocks as the market makes up its mind whether it likes this potential deal and whether it thinks that Vodafone can pull it off.”

In February, Vodafone and Hutchison Whampoa announced a deal to combine their units in Australia.