UPDATE 1-T-Mobile UK sale decision not imminent -source

* No T-Mobile UK sale decision imminent -source

* FT says Vodafone considering a bid

* Vodafone shares up 1.2 pct, DTel up 1.5 pct

(Adds details, reaction)

By Kate Holton and Nicola Leske

LONDON/FRANKFURT, June 29 (Reuters) - Deutsche Telekom (DTEGn.DE) is not about to decide whether to sell its T-Mobile UK arm, a person familiar with the situation said after a media report suggested Vodafone (VOD.L) was considering a bid.

The Financial Times reported on Monday that Vodafone, the world's biggest mobile phone company by revenue, was looking at either a bid or the possibility of a joint venture with T-Mobile UK, Britain's fourth-largest operator.

Deutsche Telekom has said it is open to all options after the UK arm took an impairment writedown of 1.8 billion euros ($2.52 billion) in the first quarter, but a person familiar with the situation told Reuters no decision was imminent.

All the operators including Vodafone would be expected to look at T-Mobile if its parent company became open to an offer and a merger could be an alternative option.

Both groups have said in the past they would like to see more consolidation within the highly competitive British market.

O2, owned by Spain's Telefonica SA (TEF.MC), leads the British market with a share of about 27 percent. Vodafone has 25 percent, France Telecom's (FTE.PA) Orange has 22 percent, T-Mobile 15 and Hutchison Whampoa's (0013.HK) 3 has 8 percent.

Any tie-up between Vodafone and T-Mobile would give the combined entity a market share of around 40 percent. It is not clear whether any deal would be approved by regulators and what would happen to the network sharing deal between 3 and T-Mobile.

With such a competitive market, analysts and some executives have also cast doubt on whether a merger or acquisition would necessarily succeed.

France Telecom's finance chief Gervais Pellissier told Reuters in May it would not be interested in acquiring T-Mobile UK because with such a competitive market, you could not guarantee holding on to the customers.

Analysts also said it would not be a good time to sell.

"Whilst many observers continue to point to the market repair story -- upside in margins that would supposedly come through the elimination of one of the five UK mobile operators -- we are more sceptical," Daiwa analyst Michael Kovacocy said in a note to clients.