Vodafone Portugal unit is opposing the idea of merging Sonaecom SGPS' mobile unit Optimus with Portugal Telecom's mobile unit TMN, a Dow Jones report said.
The report, quoting a Vodafone statement, said the bid for PT by Sonae "could create or reinforce a dominant position from which could result significant barriers to competition in the mobile market."
Sonaecom last month launched an 11.1-billion-euro unsolicited bid for PT. PT's board rejected the offer, saying it undervalued the company, the report said.
One of Sonaecom's conditions for the merger to proceed would be authorization to merge Optimus and TMN, the report said.
PT argued that that would harm competition as it would reduce the number of mobile companies in Portugal to only two from three, with the PT/Optimus combination having around 65% of the market, the report further said.