(Telecompaper) Telefonica and KPN are set to resume talks about combining their German businesses as they both look to cut costs, reports the Financial Times. Telefonica wants to explore a merger of the networks of O2 Germany with E-Plus, the 3rd and 4th largest mobile networks in Germany. Unnamed sources close to the situation said that Telefonica and KPN management would meet to discuss the possibility of network sharing in more detail. One source did not rule out a potential merger of O2 Germany and E-Plus, but said that a network sharing deal was now the most likely outcome. KPN and Telefonica held talks in summer 2012 that considered a full merger of the two groups, but the talks collapsed after they failed to agree terms.