Fastweb is reportedly exploring a potential deal for Vodafone Italy.
Citing people familiar with the matter, Bloomberg reports that Italian operator Fastweb, which is owned by Swisscom AG, is one of the potential suitors for a merger with Vodafone.
Vodafone has been considering its position in the Italian market for some time, and has also been in talks with French billionaire Xavier Niel’s Iliad about a potential merger of their Italian businesses.
Iliad failed in an attempt to swoop for Vodafone's Italian business last year after the telco rejected an €11.25 billion ($12.3bn) takeover bid from an Iliad-backed consortium.
News of a potential sale comes after Vodafone confirmed its exit from Spain last month, selling its unit to UK investment firm Zegona for $5.3 billion.
"The sale of Vodafone Spain is a key step in right-sizing our portfolio for growth and will enable us to focus our resources in markets with sustainable structures and sufficient local scale," said Margherita Della Valle, chief executive of Vodafone, at the time.
Vodafone has more than 30 million mobile customers in Italy, plus more than three million fixed-line subscribers.
Meanwhile, Fastweb has around 3.4 million mobile customers.
Earlier this month in Italy, Telecom Italia agreed to sell its landline business to investment firm KKR for €22 billion ($23.6 billion).
The long-awaited deal is backed by Giorgia Meloni's Italian government.
However, approval of the deal has been criticized by Vivendi, which opposes plans to sell TIM's most valuable asset, and is taking legal action to stop it.