* Telefonica speeds up plans for TIM Brasil sale - report
* Telecom Italia says heard of no offer for Brazil unit
* Brazil sale seems most likely solution - broker (Adds Telecom Italia statement, updates shares)
By Stephen Jewkes and Valentina Za
MILAN, Jan 3 Shares in Telecom Italia approached a two-month high on Friday, lifted by a report that Spain's Telefonica is readying a joint offer for its Brazilian wireless unit TIM Brasil.
Telefonica's 15 percent stake in Telecom Italia has brought it antitrust problems in Brazil because both Telefonica and Telecom Italia own competing mobile networks in the country.
Brazil's competition watchdog told Telefonica last month to either sell its interest in TIM Brasil or reduce its stake in mobile business Vivo, the market leader in Brazil.
Italian daily Il Sole 24 Ore reported on Friday that Telefonica was looking to set up a vehicle with rivals America Movil and Oi to take over TIM Brasil and break it up.
It said an offer for the business could come before the end of the month, adding that Telefonica would meet in the first few days of next week to discuss the matter.
Telecom Italia said in a statement on Friday that it was not aware of any offer for its Brazilian unit.
"Telecom Italia... once again states that the Brazilian company is a strategic asset," it said.
Telefonica declined to comment.
By 1139 GMT, shares in Telecom Italia were up 5 percent, while an index of European telecoms companies was up 0.4 percent. Traders said Telecom Italia was rising on the newspaper report.
"Though (Telecom Italia) CEO (Marco) Patuano has repeatedly reconfirmed the strategic nature of TIM Brasil, a sale by Telecom Italia always seemed to us the most likely solution to meet the conditions set by the Brazilian antitrust (regulator)," Milan broker ICBPI said in a note on Friday.
People familiar with Telefonica's plans said last month it aimed to break up TIM and divide its assets and network between itself and the other two mobile operators in Brazil. Other sources said the Brazilian watchdog had given the company 18 months to comply with its ruling.
The people said the Spanish group's management considers Vivo a strategic asset that it does not intend to relinquish as an alternative to selling TIM. (Reporting by Stephen Jewkes and Valentina Za; editing by David Goodman and Tom Pfeiffer)