Telefonica plans to exit its shareholding in Telecom Italia once the Spanish group has completed the purchase of Vivendi-owned Brazilian unit GVT, bringing to an end a long-running and complex relationship between the two European telecoms giants.

"After the GVT operation the message is clear, we don't want to stay in Telecom Italia," Telefonica chairman Cesar Alierta told journalists in Spain, according to Reuters.

Telefonica’s shareholding in Telecom Italia via the Telco vehicle, which is now being dissolved, increased tensions between the two operators particularly in relation to their competing businesses in Brazil: Telefonica sells services there under the Vivo brand, while Telecom Italia operates TIM Brasil.

The situation came to a head last week when both operators made competing bids for GVT. Vivendi quickly opted to hold exclusive talks with Telefonica on its proposed deal, to the undoubted disappointment of Telecom Italia.

The Italian operator said last week that it would push ahead with its development and investment plans in Brazil, as outlined in its 2014-2016 strategic plan. Nonetheless, TIM Brasil could struggle to compete effectively as a standalone entity and is also regarded as a potential takeover target.

Last week, local telco Oi said it had hired Banco BTG Pactual to advise it on its alternatives with regard to acquiring Telecom Italia's stake in TIM Brasil.

Meanwhile, Vodafone is also reportedly interested in acquiring one of Brazil's big operators.

Data compiled by Bloomberg further indicated that Telefonica’s plan to sell new Telefonica Brasil stock to fund the cash portion of the overall €7.5 billion deal for GVT would keep Telefonica’s options open for further deals, such as a possible sale of TIM Brasil.