Brazilian carrier Tele Norte Leste Participacoes, which operates under the Oi brand, said Thursday it is in discussions to acquire fixed line rival Brasil Telecom.

Local media have valued the deal at around $2.7bn.

“Regarding possible investments in other fixed and mobile telecom companies, specifically in relation to Brasil Telecom Participacoes S.A., we inform that we are currently engaged in conversations with its controlling shareholders,” a statement form Oi said.

“Such conversations have been intensified in the last hours, but no document of whatever nature has been executed so far.”

The move could have a knock on effect on the long running speculation that Portugal Telecom is seeking to offload its 50 per cent share in Brazilian operator Vivo. It is believed that Portugal Telecom intends to substitute its half of Vivo for another investment in the Brazilian telecoms market.