Spain's Telefonica (TEF - Get Report) is making a $24 billion bid for Dutch telco KPN (KPN), The Wall Street Journal Online reported Sunday.

Telefonica has contacted KPN to initiate talks, according to the report, although it's unclear if KPN has responded. KPN could not be reached for comment, and Telefonica declined to comment, The Journal said.

During a wave of telecom mergers in 2000, talks between the two collapsed when Telefonica's board vetoed a possible merger because of concerns about the Dutch government's stake in KPN. At that time, the Dutch government owned about 43% of KPN; today, it owns about 20%, according to the news report.

A new wave of consolidation emerged among European telecom firms this year as the companies seek new sources of revenue and the teleconomy began to show signs of recovery after its long downturn following the bursting of the tech bubble in 2000.

In March, Vodafone ( VOD) bought wireless companies in Romania and the Czech Republic for a total of $4.4 billion. Then in April, Telefonica -- which has a large part of its assets in Latin America -- bought a 51% stake in the Czech Republic's Cesky Telecom. Another deal just announced Aug. 30 between KPN and rival Telfort would increase KPN's share of the Dutch mobile phone market from 38% to 53%.

Shares of Telefonica closed at $49.32 Friday. KPN's shares ended the day at $9.00.