Almost £10 billion ($12bn) has been wiped off the value of BT and Vodafone, with the two companies struggling amid rising costs and debts.

A report from This Is Money, which appeared in The Financial Mail on Sunday, notes that the two telecom firms are sitting on a debt pile of £65 billion ($78bn) - which is almost double their combined value.

It comes at a time when both BT and Vodafone have acknowledged the difficult financial climate and pushed on with cost-saving strategies.

According to the article, Investment bank Credit Suisse last week downgraded its rating on Vodafone, while activist investor Cevian Capital is losing faith that the group can turn it around – recently slashing its stake in Vodafone.

Vodafone's debts are reportedly around £45.5 billion ($54bn) – close to double its £26bn ($31bn) market value, while BT has debts of £19bn ($22bn). The telco is valued at £13bn ($15bn).

Voda and BT under pressure to perform

Vodafone's shares have slumped by 17 percent this year, while its chief executive Nick Read has been under constant pressure amid disappointing share results.

Jobs could be cut at Vodafone as the company is looking to save over €1 billion ($1bn) in costs by the start of its 2026 financial year.

It's little surprise that Vodafone has looked to consolidate its business in the last year, as the operator finally struck a deal to sell off some of its Vantage Towers unit, creating a new joint venture with KKR and Global Infrastructure Partners (GIP) in the process.

The deal could net Vodafone a maximum of €7.1 bn ($7.1bn), although this is dependent on the take-up in the voluntary takeover offer and subject to GIP and KKR raising further equity before closing to increase their stake in the JV to 50 percent.

Vodafone is also in advanced talks with domestic rival Three UK, of CK Hutchison, over a potential merger. DCD did an extended feature on this last month, exploring the merits behind such a merger that would take the UK's mobile operators from four down to three.

The company has been no stranger to consolidation, after recently acquiring Portuguese operator Nowo from MasMovil, while it exited the Hungarian market completely, selling its Hungarian business unit for $1.8bn in August.

Meanwhile, BT recently raised its cost-savings target by £500 million ($602m) from £2.5 billion ($2.8bn) to £3bn ($3.36bn) by the end of 2025.

The company plans to free up cash flow to fund its network expansion, while its chief executive Philip Jansen suggested jobs could be cut as a result of these savings.

Potential job cuts come at a time when BT has faced several strikes from its workers, which are supported by the Communication Workers Union (CWU) over pay disputes.

In an effort to mitigate the rising costs, BT is considering merging two of its divisions, reports The Telegraph. The telco is gearing up to combine its Global Services division, which provides security and cloud computing services, with its Enterprise unit, which serves business and government customers in the UK.