A big new player could soon make its mark on the Australian telecoms scene, with the proposed merger of Vocus and M2 to create a $3 billion company.

Many hope the new force will be able to compete with industry giants Telstra and Optus.

The boards of both firms have unanimously recommended an all share merger that would give M2 shareholders 1.625 Vocus shares for every slice of M2 they own.

If shareholders back the deal and the Australian Competition and Consumer Commission (ACCC) approves it as well, Australia’s fourth biggest integrated telecommunications company would be born.

Insiders say ACCC approval is highly likely.

The companies say their combined revenue would hit up to $1.8 billion, with pre-tax earnings of about $370 million this financial year.

But the merged companies would seek to make cost savings of up to $40 million per year by financial year 2018.

They also want to boost revenue by bundling more services together for clients.

Reports say if the merger happen, the combined company would be able to provide retail internet, electricity and gas sales, corporate internet and IP voice, wholesale internet and IP voice, data centre and cloud services and access to various fibre technologies.

Vocus chairman David Spence said it was a good deal for all involved.

“The businesses combine Vocus' telecommunications infrastructure and corporate customer base with M2's demonstrated expertise in the consumer and SME [small-medium enterprise] segments,” he noted in a statement.

The companies say they will put the deal to a shareholder vote in early 2016.