(Bloomberg) -- Swisscom AG is weighing an offer for Vodafone Group Plc’s Italian business early next year, potentially countering a rival bid from Iliad SA for the unit, people familiar with the matter said. 

The possible deal would combine Vodafone’s mobile service with Swisscom’s Fastweb SpA fiber broadband carrier in the country, the people said, asking not to be identified because the deliberations are private. Swisscom and Vodafone are in talks to discuss the terms and a formal bid could be announced as soon as next month, they said. No final decisions have been made and Swisscom may decide against an offer. 

Competition for the asset is getting stronger after Iliad this week made an offer to combine its own Italian operations with Vodafone’s in a deal that would value Vodafone Italia at €10.45 billion ($11.5 billion). Bloomberg News reported last month that Swisscom’s Fastweb was considering a deal for the business.

Representatives for Fastweb and Vodafone declined to comment. 

Read More: Iliad Bids for Vodafone Italy Control at €10.5 Billion Value

Italy is one of the most competitive telecommunications markets in Europe, in part because of Iliad, which moved into the country in 2018 offering cheaper, no-frills mobile plans that sparked a price war. Monthly subscriptions for fiber-optic service, which usually include unlimited Internet access, can cost as low as €20 to €25. That’s about a quarter of what many US consumers pay. 

--With assistance from Thomas Seal.

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