As per recent reports, U.K. cable TV behemoth Liberty Global plc LBTYA may consider taking over Spanish telecom behemoth Telefonica SA TEF-controlled O2. However, this deal is contingent on the collapse of O2’s GBP 10.25 billion (roughly $15.25 billion) merger deal with U.K. wireless giant Hutchison Whampoa, which is currently operating under the 3UK brand.At present, the U.K. wireless market is dominated by four large players, namely, O2, 3UK, Vodafone Group Plc. VOD and BT Group Plc. BT and if the deal is passed, it would reduce the number to three. Thus, the proposed merger deal between 3UK and O2 is likely to be vetoed by the European Union Competition Commission (EC) on anti-competitive grounds.Where Does Liberty Global’s Interest Lie?Liberty Global has been under pressure to step up its mobile operations in various European markets where rivals are actively promoting quad-play bundled services which include video, landline phone, broadband data (Internet) and wireless offerings.Last year, the company was in talks with U.K. telecom giant Vodafone concerning a series of transactions such as global asset swaps. However, the merger negotiations came to an end after the companies failed to reach an agreement on valuations.Meanwhile, the potential acquisition of O2 would radically expand Liberty Global’s mobile operations in Europe and boost its subscriber count and efforts to offer quad-play services.Bottom LineThough Liberty Global – a Zacks Rank #2 (Buy) stock -- values the flexibility of being a virtual mobile service provider, the company has been implementing changes in its strategy with the intention to take over mobile operations instead of borrowing network services. This is evident from the company’s acquisition of Belgian telecom operator BASE N.V. as well. Thus, it won’t come as a surprise if Liberty Global pursues the takeover of O2.Meanwhile, we note that Telefonica is on the lookout for potential buyers and is also mulling over an initial public offering or strategic shift into fixed line markets if the deal to merge with 3UK fails.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report TELEFONICA S.A. (TEF): Free Stock Analysis Report BT GRP PLC-ADR (BT): Free Stock Analysis Report LIBERTY GLBL-A (LBTYA): Free Stock Analysis Report VODAFONE GP PLC (VOD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research