The parent company of mobile operator Three Ireland is in advanced talks to buy rival O2 Ireland, according to reports.

News agency Bloomberg reports that Hong Kong-based Hutchinson Whampoa could strike a deal to buy Telefonica SA’s Irish unit within the next two weeks, before other bidders for the company even pitch their own offers.

Spain’s Telefonica is seeking to sell O2 Ireland as part of an attempt to cut €4.2 billion from its €51.2 billion debt pile by the end of 2013.

The company could raise more than €700 million of that from its Irish operations, while its Czech division and stake in China Unicom are also potential divestment targets.

Three is Ireland’s third-largest mobile operator behind Vodafone and O2. Last year it failed in its €2 billion bid for rival Eircom, which was under court protection from creditors at the time.

A restructured Eircom, which operates as eMobile and Meteor in the mobile market, is now believed to be a potential bidder for O2.

Cable company UPC Ireland, owned by John Malone’s Liberty Global, is also said to be mulling an approach.

Any bid by Hutchinson or Eircom would likely need Competition Authority approval in order to be successful.

What impact an effective merger would have on each networks’ telecoms infrastructure and 4G licences is also unclear.