Telefonica confirmed analyst speculation that it’s open to mergers and acquisitions in Mexico, where it trails market leader America Movil.

“We are very open minded to consolidation in Mexico,” said COO Jose Maria Alvarez-Pallete, quoted by Reuters, at a conference in Barcelona.

He added that consolidation might take the form of roaming deals or network sharing, as well as a merger.

There are some reports the Spanish giant has held discussions with operator Iusacell, part-owned by Grupo Televisa (dominant in Mexico’s broadcast market).

Telefonica is believed to be working with Banco Santander and Banco Bilbao Vizcaya Argentaria to explore potential options.

Telefonica’s Movistar, the second-largest mobile operator in Mexico, has around 19 million connections, but that is way behind the 72.5 million bagged by America Movil’s Telcel.

Telefonica’s openness to Mexican M&A follows the Spanish operator’s Q3 announcement that it had hit its debt-reduction target early, and was improving operating margins in its home market and delivering organic revenue growth.

The desire to chip away at the dominance of America Movil may well have the approval of the country’s government and newly-formed regulatory body.

President Enrique Peña Nieto has set the wheels in motion to overhaul Mexico’s telecoms and broadcast sectors by boosting competition and curbing market power exerted by dominant players.