Vodafone may approach Germany's largest cable provider Kabel Deutschland about a takeover bid as early as this week, according to published reports.
Vodafone, the world's second-largest wireless carrier, is waiting for its German rival to release its earnings results on Wednesday before beginning negotiations, a source told Bloomberg.
The acquisition of Kabel Deutschland would boost Vodafone's position against other cable competitors.
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It would also help Vodafone avoid paying Deutsche Telekom rental fees on copper lines for its TV, internet and fixed-line offers to mobile customers. Vodafone Germany has 3.2m fixed-line internet subscriptions, some of which could be transferred to Kabel Deutschland's network.
Shares in Kabel Deutschland rose 4.24% to €71.34 as of 11:46 following the news, while Vodafone's dropped 0.12% to 167.60p.
Kabel Deutschland, which provides TV, internet and phone services to more than 8.0m households in Germany, had an enterprise value including debt of €7.8bn at the end of September, according to data compiled by Bloomberg.
Earlier this month Vodafone posted a worse than expected drop in group earnings for the last three months of 2012. Revenues fell 1.8% to £11.38bn year-on-year for the quarter, experiencing the biggest decline in the take up of services in Europe.
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