Some of the biggest investors in Vodafone say they are open to a European tie-up with Liberty Global, as the British company is now in a stronger position to negotiate a deal with John Malone's cable group.
Shares in the world's second largest mobile operator hit a 14-year high last week after Liberty's billionaire chairman Malone said a much-mooted union would be a "great fit".
The positive reaction stands in contrast to previous occasions when talk of a deal sent shares in Vodafone tumbling on fears that it, as the suitor, would overpay in order to snare Liberty, Europe's biggest cable operator.
"There is a strategic rationale to the combination of the assets," one top 10 shareholder in Vodafone told Reuters on condition of anonymity.
"And until last week, the market assumption had been that Vodafone was coming from a position of weakness. What has changed with John Malone’s comments is that the conversation between the two parties might actually be a more equal one," he added.
Vodafone has 446 million mobile customers in countries ranging from Albania to Ireland, Qatar, India, South Africa and New Zealand.
But it has lost ground to some rivals in an industry-wide trend to provide internet broadband, TV, home phone and mobile services in one bundled product, known as quad-play.
It has already bought cable networks in Spain, Germany and Britain, with the higher-capacity network also helping to carry its mobile traffic.
But some analysts believe a purchase of Liberty Global could enable the two companies to create the leading network in Europe in one go.
Liberty has also recently bought a mobile operator in Belgium, in a change of strategy after previously suggesting it did not need to own its own mobile operations and could instead rent capacity from rivals.
Liberty has a market capitalisation of about $49 billion and Vodafone's is around £67.3 billion.
Analysts estimate that a deal could result in gross synergies of around £16 billion.
Malone's comment, in an interview to Bloomberg, that there would be "very substantial synergies" if they could find a way to combine the businesses "with respect to western Europe" has also sparked speculation that Vodafone could demerge its faster-growth emerging market operations to make it happen.
There are many barriers to the deal. The two companies only have overlap in a few countries, including Britain, Ireland, the Netherlands and Germany and of those, only two are big enough to warrant such a deal.
Malone himself also noted that there are philosophical issues with the way the firms are run, with Vodafone relatively lowly leveraged and paying dividends, while Liberty has high debt and prefers buybacks.
Vodafone, with its relatively corporate brand, also likes to tout its broad geographical spread to enable it to offer global coverage to multinational firms.
Still, investors say Vodafone is looking at its options after Malone signalled the change of tone. If a full merger proved too complicated, the two sides could look at country by country deals such as in Britain where Vodafone could partner with Liberty's Virgin Media.