UK FTSE eyes best weekly rise in over 3 yrs as M&A boosts telcos

* FTSE 100 up 0.6 pct; eyes biggest weekly rise since Nov '11

* BT, Vodafone boosted by consolidation prospects

* Greek elections over the weekend seen as hurdle

By Francesco Canepa

LONDON, Jan 23 (Reuters) - Britain's main share index was on course for its biggest weekly gain in more than three years as it increased for a seventh straight day on Friday, helped by a rise in telecoms shares on the prospect of a sector consolidation.

Over the past week, equities across Europe have been boosted by speculation about fresh monetary stimulus by the European Central Bank, which was finally announced on Thursday.

Telecoms group BT and Vodafone, both up around 2.5 percent, were among standout performers after a deal by Three's owner Hutchison Whampoa to buy Telefonica's O2 British mobile business.

Investors were pricing in reduced competition and higher margins for UK mobile operators Vodafone, Three and EE, which BT is in exclusive talks to acquire.

"The market as a whole should be an awful lot less competitive than it otherwise would have been," said Andrew Hogley, an analyst at Banco Espirito Santo Investment Bank.

"That's a positive for margins and profitability."

He flagged BT as the main beneficiary from the lower competition while he saw a smaller impact for Vodafone, given that Britain only accounts for 15 percent of the group's revenues.

The broader FTSE 100 index was up 0.6 percent at 6,837.02 points at 0904 GMT, on track for a 4.4 percent gain for the week, the biggest since November 2011.

After the euphoria caused by the ECB's quantitative easing programme, traders saw a potential hurdle for the market's rise in Greece's general elections over the weekend, which anti-bailout party Syriza is set to win.

"We're feeling the effect from QE yesterday, but with the Greek elections over the weekend I wouldn't be surprised to see some profit taking," Manoj Ladwa, head of trading at TJM Partners (Other OTC: PGPHF - news) , said. (Reporting By Francesco Canepa; editing by Keith Weir)