DEALTALK-Deutsche Telekom's search for UK fix gathers pace

* Sale of UK unit possible at right price - source

* New management in place to turn business around

* Telefonica's O2 monitoring situation, no talks

By Nicola Leske, European Telecoms Correspondent

BERLIN, July 2 (Reuters) - Deutsche Telekom (DTEGn.DE) is working feverishly to overhaul its struggling UK T-Mobile unit but will part company with the business if one of a range of possible bidders makes a good offer.

"If the price is right, T-Mobile will be sold," a person familiar with Deutsche Telekom's thinking said on Thursday.

Media reports peg the selling price of the unit, which has lost customers for three quarters, at around 3 billion euros ($4.23 billion).

Deutsche Telekom has said its priority is to get the business working well.

"The main task...is to strictly focus on repositioning the business in the difficult economic environment," it said in April after it cut its full-year targets.

The target revision was partly due to its UK business, which generated first-quarter sales of 836 million euros ($1.18 billion), a decline of 21 percent and less than a fifth of the group's total revenue of 5 billion euros.

After the UK arm took an impairment writedown of 1.8 billion euros ($2.52 billion) in the first quarter, D.Telekom said it was open to all options, but a person familiar with the situation told Reuters on Monday no decision was imminent. [ID:nLT686454]

Still, the figures underline the need for an urgent fix: T-Mobile UK's operating margin is around 14 percent, significantly below the 31-percent average of Deutsche Telekom's mobile businesses in other countries.

T-Mobile has put out feelers to the operators to gauge their reaction, people familiar with the situation have said. [ID:nLU346678]

Industry watchers say Telefonica's (TEF.MC) O2, the market leader with a 27 percent share, is monitoring the situation closely but has not held talks on a deal.

Thomas Friedrich, a telecom analyst at UniCredit, said "the idea of a potentially defensive move by O2 made sense".