The Brazilian subsidiaries of Telecom Italia and Telefonica expressed interest in negotiating a joint acquisition of Oi Group’s mobile assets, arguing a potential deal would boost competitiveness and investment capacity in the telecoms market.

In a statement to shareholders, TIM Participacoes explained the companies had informed Oi financial adviser Bank of America Merrill Lynch about their interest in commencing negotiations, with a view to a potential joint offer to acquire all or part of its mobile operations.

A deal would see Oi’s mobile business split between the two operators, the company said.

TIM Participacoes stated the move would accelerate its growth, increase operational efficiency and improve quality of services.

Telecom Italia’s Brazilian unit added the eventual acquisition would bring benefits for the telecoms market in general, while also strengthening its competitiveness and investment capacity.

Oi appeared to welcome the move, explaining in a separate statement it demonstrated there was market interest in its mobile business.

The Brazilian operator also said it continued to analyse existing alternatives which might maximise the outcome of its strategic plan.

Oi reportedly initiated discussions with Telefonica and Telecom Italia about a possible sale of its mobile unit in September 2019. The operator filed for bankruptcy protection in June 2016, after failing to restructure BRL65.4 billion ($14.1 billion) worth of debt.