* Warburg Pincus and Apollo only bidders left - sources
* To hand in final bids on Monday - sources
* Bids could value unit at more than 3 bln euros - sources (Adds valuation, Dutch market details)
By Arno Schuetze and Pamela Barbaglia
FRANKFURT/LONDON, Feb 11 (Reuters) - Deutsche Telekom has narrowed the bidders for its T-Mobile Netherlandsdivision to U.S. private equity firms Warburg Pincus andApollo, people familiar with the transaction said.
The two groups are expected to submit their final bids,which may value the unit at more than 3 billion euros ($3.4billion), on Monday, the sources told Reuters.
Deutsche Telekom and Warburg declined to comment, whileApollo was not immediately available for comment.
The German telecoms group is considering exiting theNetherlands because it is a very competitive market whereconsumers are shifting to all-inclusive packages.
It may, however, opt to keep the business if it fails to getan acceptable price, one of the sources said.
John Malone's cable company Liberty Global willnot bid for Deutsche Telekom's Dutch unit as it is in talks withmobile phone networks operator Vodafone about forming ajoint venture in the Netherlands, the sources said.
Other initial bidders such as buyout groups Apax and CVC have also dropped out, they added.
Deutsche Telekom is hoping get at least 3.6 billion euros orabout 8 times the unit's expected earnings before interest,taxes, depreciation and amortisation (EBITDA) of 450 millioneuros, the sources said.
The buyout groups are likely to offer less than 7.5 timescore earnings as margin pressure is unlikely to fade soon andgrowth prospects are limited, one of the sources said.
Peers such as KPN, Telefonica Deutschland, Vodafone or Switzerland's Sunrise trade at6.7 to 8.6 times their expected core earnings.
Warburg Pincus is working on the deal with DeutscheTelekom's former chief executive officer René Obermann, who isalso a former chief executive of Dutch cable operator Ziggo andknows the Dutch market well.
T-Mobile Netherlands saw its EBITDA hit in 2015, with a 17percent decline to 382 million euros in the first nine months.
If the slide continues at the same pace, its annual coreearnings would fall from 630 million euros in 2014 to roughly520 million euros in 2015, while a further slide to 450 millionin 2016 is anticipated.($1 = 0.8812 euros) (Additional reporting by Harro ten Wolde; Editing by GeorginaProdhan and Alexander Smith)
Vodafone (VOD)
