Telecom Italia’s board plans to discuss how to strengthen the operator’s mobile business at a meeting next week, including the possibility of mergers and acquisitions, according to Bloomberg.

One potential deal that will be discussed is a combination with local cellular rival H3G (3 Italy), which is owned by Hutchison’s Whampoa, said a report which quotes “people familiar with the situation”. The meeting is on 11 April.

Such a merger would bring together the first and fourth largest operators in Italy with a combined market share of approximately 45 per cent, according to Wireless Intelligence figures.

The two other operators in the market are Vodafone and Vimpelcom’s Wind.

However, Telecom Italia is reportedly reluctant to pay cash in any deal, although offering stock would weaken investor interest. Without any premium, the Hutchison unit would be worth about EUR1.5 billion.

And the deal could run into both regulatory and financial obstacles.

As well as competition concerns, the two sides would have to agree over valuation. Discussions between Telecom Italia and Hutchison over the sale of H3G are thought to have failed in 2010 over this issue