Vodafone says it is making an indicative proposal to buy Australian firm Cable & Wireless Optus (CWO) in order to expand its presence in the country.
Vodafone Pacific will enter an agreement with the Australian arm of Hutchison Telecommunications to transfer one million of CWO's 3.5 million customers to Hutchison.
This is intended to head off any regulatory concerns there might be about a deal leading to a mobile phone duopoly in the country.
Should the proposal be accepted by CWO, and cleared by the regulatory authorities, Vodafone Pacific would merge its mobile operations with those of CWO to create a new Australian-listed mobile group.
Vodafone's shares in London rose on the news, finishing the session ahead 3.25p at 226p.
Cable & Wireless, which owns 52.5% of CWO, has confirmed it received expressions of interest "from a number of parties".
It has been estimated CWO could be worth as much as A$20 billion Australian (£7.51 billion), but Vodafone has declined to put a figure to the possible acquisition.