Vodafone in two-horse race

MOBILE phone giant Vodafone is going head-to-head with American rival Cingular in the race to take control of AT&T Wireless, which studied the bids over the weekend.

Japanese firm NTT DoCoMo, with about 17% of AT&TW, decided against bidding before the Friday deadline, leaving a two-horse race.

Cingular is understood to have increased its initial cash offer of $11 a share to compete with Vodafone's bid, believed to be $13 a share. The offers value AT&TW, the third largest US mobile phone group, at about £18.5bn.

Analysts believe Vodafone can only win control by overpaying. Vodafone still refuses to confirm whether it is involved in the auction.

AT&TW will not make an announcement on the bid process until tomorrow. Wall Street is closed today for the Presidents' Day holiday. AT&TW plans to name the successful bidder by the end of the month.

If Vodafone's bid is successful, AT&TW will be its biggest acquisition since it bought German rival Mannesmann for about £100bn in 1999.

T-Mobile is launching its 3G services in the UK today, joining Austria and Germany.