(Bloomberg) — British wireless carrier Vodafone Group Plc has recently explored a potential purchase of Three UK from CK Hutchison Holdings Ltd., people with knowledge of the matter said.

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Vodafone expressed interest late last year in acquiring its smaller rival, according to the people, who asked not to be identified because the information is private. The approach didn’t lead to an agreement, and it isn’t currently in active negotiations with CK Hutchison, the people said.

Representatives for Vodafone and CK Hutchison declined to comment.

A combination of Vodafone and Three UK has been speculated for years, and Vodafone has teamed up with CK Hutchison in other markets like Australia.

But in Britain, regulators have stood in the way of consolidation between wireless carriers. In 2016, Three was blocked from buying Telefonica SA’s rival operator O2 by the European Union with backing from U.K. watchdog Ofcom.

O2 subsequently merged with Liberty Global Plc’s Virgin Media. Although the tie-up was scrutinized over concerns the combination could lead to higher prices and poorer wholesale services, the U.K.’s Competition and Markets Authority concluded that was not likely and approved the deal in May.

Other markets have started allowing deals that reduce the number of mobile players from four to three — including in Ireland, where Three acquired O2’s local business. After Brexit and years of stagnant returns for the sector, some phone company bosses have been hoping the dynamic would change in the U.K. as well.

‘Dysfunctional’ Market

Investors are keeping a close eye on London-based BT Group Plc, which has been bracing for an offer during years of speculation. Last year, telecom tycoon Patrick Drahi raised his stake in the company to 18%, but said he won’t make a takeover offer, pursuing an approach of creeping control that could flush out other interest from private equity or rival telecom operators.

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Three UK Chief Executive Officer Robert Finnegan has lamented the British phone market as “dysfunctional” and has expressed hope that regulators will now be more open-minded to mergers. Meanwhile, Vodafone CEO Nick Read hinted at a combination with Three in a November interview with the Sunday Times.

Vodafone has about 20 million subscribers across its mobile, fixed line and broadband units, according to its website, compared with Three UK, which says it has 9.3 million.

Shares of CK Hutchison, led by billionaire Victor Li, have risen 11% this year to give the Hong Kong conglomerate a market value of about $27.5 billion. Vodafone has a market capitalization of 31.8 billion pounds ($43.2 billion).

(Adds Virgin Media O2 in 6th paragraph, BT in 9th.)

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