New Zealand's Pay TV giant Sky Network Television has confirmed it is in discussions with Vodafone New Zealand about a possible merger.

In a statement on the NZX, the broadcaster confirmed it is in discussions with Vodafone regarding a ‘potential transaction' involving a combination of the businesses of SKY and Vodafone New Zealand.

The announcement follows months of media speculation Vodafone was looking to sell its New Zealand operations.

However, the NZ Herald reported Sky TV chief John Fellett downplayed talk of a possible merger, saying the telco is “too big” for Sky TV.

Vodafone and Sky are already involved in a partnership that offers customers bundles of each company's services.

According to Sky, the discussions are ongoing and incomplete and may not result in a transaction occurring.

TechDay has reached out to both Sky TV and Vodafone for further information.