Vodafone Group is said to have halted plans to approach German cable operator Kabel Deutschland about a takeover bid, according to Bloomberg.
Vodafone was understood to be planning to put forth an offer after Kabel released its earnings results last week.
However, talks were put on hold as leaks of a potential deal complicated internal discussions, sources told the news agency.
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Vodafone no longer has a time frame for a possible approach, but may still decide to make a bid at some point, the sources added.
"This leaves Vodafone in an awkward situation," Robin Bienenstock, an analyst at Sanford C. Bernstein, wrote in a note.
Bienenstock said it opened the possibility that Kabel Deutschland will "enter a partnership relationship or more with another wireless player. This could leave Vodafone counter-bidding or simply marginalised".
Royal KPN NV and Telefonica Deutschland Holding AG are potential candidates to partner with Kabel Deutschland, Bienenstock said.
Representatives for Vodafone and Kabel Deutschland declined to comment.
Shares in both companies climbed in morning trading.
Kabel Deutschland, which delivers TV, internet and phone services to more than 8.0m German households, would help Vodafone's struggling business by protecting the group's market share from other cable rivals offering mobile packages.
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