Hutchison Whampoa, the owner of Britain's fourth largest mobile operator 3 Group, is preparing a bid for EE or O2, several sources familiar with the matter said.

The mobile groups are already in talks on a deal with BT Group.

The Chinese company could put forward a bid for either EE or Telefonica's O2 by the end of the year as BT is expected to decide on a deal in coming weeks, the sources said. 

BT, which wants to buy a mobile business, is in talks with both O2 and EE, which is owned by Orange and Deutsche Telekom. 

They confirmed yesterday they were in talks to sell Britain's biggest mobile network operator EE to BT as part of a wider review of its options. O2 is in second place in the UK mobile market with 22 million subscribers. 

BT's choice between buying Britain's number one or two mobile operator will come down to whether it wants to stretch to buy EE, a larger company, or the simpler option presented by O2. 

A deal with EE would make a lot of sense for Hutchison given the high quality of the asset and because the companies already cooperate in Britain through a network sharing agreement deal, the sources said. 

But EE's owners Orange and Deutsche Telekom may find it tough to agree a price as Hutchison has a reputation as a tough negotiator, one of the sources said. 

Also, Telefonica may prefer to sell O2 to BT in a "clean and quick deal" with no competition issues after a lengthy competition review in Ireland to sell O2 Ireland to Hutchison, the sources said. 

But the Spanish group, which wants to sell its UK business to repay debt, could be swayed towards a deal with Hutchison if it were to lose out to EE on the BT deal, they added. 

Buying O2, which analysts value at about £9.4 billion, would also be more digestible for Hutchison than EE, valued at €11 billion.

Hutchison's telecoms subsidiary 3 Group is now present in the UK, Italy, Ireland, Sweden, Denmark and Austria.