­Telefonica's German subsidiary, O2 is considering a network sharing agreement to cut costs and has named KPN's local arm, E-Plus as a possible partner.

Telefonica is currently in the process of listing just over 23% of the Germany company's shares on the local stock market.

"When people were looking at a potential coming together of Telefonica Deutschland and E-Plus, there was some significant analysis of potential network synergies," Rachel Empey, chief financial officer of Telefonica Deutschland, told investors on a conference call. "Quite a lot of those synergies might be available through network sharing."

The two companies are understood to have spoken in recent months on the aborted merger between their two networks, initiated as part of E-Plus' parent company KPN's attempts to hold off America Movil.

Since then E-Plus has looked at selling its tower assets and had hired the same bankers for that sale as are managing Telefonica's stock market listing. Network sharing deals usually see the participating companies hiving off their tower assets into a stand-alone joint venture company, which could fit in with E-Plus's disposal plans.