Two-way battle looms for AT&T

JAPANESE mobiles giant NTT DoCoMo has withdrawn from the race for US counterpart AT&T Wireless, leaving Britain's Vodafone in a two-way fight with Cingular for the $30bn (£15.8bn) company.

Vodafone's board is due to meet today, ahead of tonight's bid deadline, to decide whether to make an offer for AT&T Wireless.

However, most analysts believe Cingular remains the hot favourite to win the battle. NTT DoCoMo, Japan's largest mobiles group, owns 16% of AT&T Wireless.

DoCoMo is worried by the probable cost of the deal and by the fact its own track record on internationaltakeovers has been far from successful .

Vodafone, which has a minority stake in America's number one operator Verizon, has done little to dampen speculation that it will today trump Cingular's $30bn-plus bid for AT&T Wireless, but many analysts are concerned the company may prove too expensive to digest.

'It's sensible for Vodafone to look at the asset because, by submitting interest, it will gain access to the management accounts,' said one fund manager.

'But they would have to make a very strong case to investors to buy it . . . I am 99% convinced that Cingular will end up owning the asset.'

Cingular, the second-largest mobile carrier in the United States, has already identified about $3bn in cost savings from merging with AT&T Wireless.