The float and listing of telecommunications company 2degrees has been put on hold amid speculation it may be merged with local broadband operator Orcon.
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The Australian Financial Review has reported the owners of 2degrees and the New Zealand arm of Vocus, now renamed Orcon, are talking at putting the two businesses together.
A spokesperson for 2degrees confirmed preparations for an initial public offering (IPO) have been paused, but offered no other information.
Its US owner, the Canadian listed Trilogy International (TIP), has been put into a trading halt pending an announcement.
"TIP ... has paused activity on an initial public offering of the shares of Two Degrees Group ... to consider a possible alternative transaction with another party," it said in a statement.
It expected to give further details in the next few days on whether it would pursue the new deal or resume the move to sell 2degrees shares.
Last week 2degrees named a board of directors for a locally-listed company.
Orcon is owned by a fund run by investment company Macquarie, and has long been slated for a listing on the NZX as part of a restructuring of its former owners Vocus.
The two companies have separately been holding roadshows with investment funds about potential share floats and listing on the NZX.
A merger of the two telcos would bring together 2degrees mobile services with the broadband operations of Orcon, which also includes Slingshot, Stuff Fibre, and Flip, creating a sizeable third player in the local market after Spark and Vodafone.
Local investment analyst Greg Smith of Fat Prophets said a union of 2degrees and Orcon would have nearly 20 percent of the New Zealand market, revenue touching $1 billion, and earnings of $200m.
"There's a strategic logic ... that would be quite a compelling proposition."