The UK's Vodafone, the world's top wireless operator, and US rival Cingular are in a head-to-head battle.

AT&T shares rose 15 cents to $11.82, as Vodafone's ADRs, or American Depositary Receipts, also rose 85 cents to $25.76.

Earlier Japanese newspapers said NTT DoCoMo was not expected to bid for the struggling third-ranked US group.

Reviewing offers

Cingular, owned by SBC Communications and BellSouth, had already submitted a $30bn (�18bn) informal offer for the wireless operator, but may have increased that before the deadline passed.

Vodafone had been expected to put forward an offer of about $35bn, or around $12.50 per share.

AT&T Wireless, based in Redmond, Washington, is expected to review the bids over the weekend and could come to a decision early next week.

"Our view is that Cingular is going to be the company that ends up buying AT&T Wireless," said Kirk Boodry, global telecommunications analyst for Dresdner, Kleinwort Wasserstein.

Tough times

For competition reasons Vodafone would have to ditch its 45% stake in US market leader Verizon Wireless if it did buy AT&T Wireless.

AT&T Wireless announced in January that it would look at buyout offers after it posted an unexpected loss for the last three months of 2003.

The group blamed a host of technical and operational problems for its $84m (�50.5m)loss and announced its average revenue per customer had slipped to $58.70 (�35.30) - down 2.2% from a year earlier.

Meanwhile Philip Townsend, director of telecom research at Natexis Bleichroeder, questioned whether the buy would be the right move for Vodafone.

'Soft option'

He told BBC Radio Five Live that the firm was looking to boost its revenues.

In Europe mobile phones had about 85% market penetration - the overall number of mobile phone users in the population - and it was Western Europe where Vodafone made most of its money, he said.

"Potentially the United States has a 50% penetration rate... in theory there's a lot of growth."

But Mr Townsend added that the low population density of the US would mean that the firm would have to "cover the US with base stations" to produce its network which would be "incredibly expensive".

The group has also suffered amid slowing subscriber growth and cutthroat competition among America's six national companies.

A Russian buy would be more "sensible" as that market had the potential to "grow very significantly".

Compatibility

Mr Townsend added that Vodafone's chief executive -American Arun Sarin - may be attracted to the US market as it would be a "softer option" and a market he knows well.

However, from a technical point of view, AT&T Wireless would be a better fit for Vodafone.

The company uses the same technology - GSM - as the rest of Vodafone's global mobile network.

Verizon, in contrast, is using the CDMA standard, which means that Vodafone customers from around the world will not be able to roam on the Verizon network, even if they have tri-band phones that work in the United States, and vice versa.