Spanish telcos Telefónica and MasOrange are both considering a potential deal to buy Vodafone Spain.

As reported by Bloomberg, the two carriers have held informal talks over a potential deal.

An agreement would represent further consolidation in the Spanish market.

Bloomberg reports that the possibility of splitting Vodafone's fixed line and mobile businesses could be explored due to antitrust issues.

It notes that sources familiar with the matter state that MasOrange could take over Vodafone’s low-cost brand Lowi.

Vodafone sold its Spanish business to UK investment firm Zegona for €5 billion ($5.7bn) last year, though continues to trade under the name Vodafone in the country.

Earlier this year, Telefónica's chairman Marc Murtra outlined the need for more consolidation in Europe.

"Our opinion is that the high level of fragmentation in the telecommunications sector in Europe, unique in the world, and the excessive regulation, also unique in its intensity, have uprooted the possibility that European telcos could have been technological giants capable of competing with their US and Chinese counterparts, ensuring Europe’s sovereignty and productivity," said Murtra back in April at the company's AGM.

In order to compete with the US and China, Murtra claims that consolidation is necessary.

Rival telco MasOrange was born of out a recent merger, combining Orange and MásMóvil last year to create the country's biggest mobile operator.

Earlier this year, MasOrange signed a fiber JV with Vodafone, with the network set to span 12.2 million premises across the country.