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Telecom Italia takes first step to spin off network

Franco Bernabe, Telecom Italia chairman and CEO, poses in his office in Rome, April 19, 2013. REUTERS/Alessandro Bianchi
Franco Bernabe, Telecom Italia chairman and CEO, poses in his office in Rome, April 19, 2013. REUTERS/Alessandro Bianchi

By Danilo Masoni

MILAN (Reuters) - Telecom Italia took a first step to spin off its domestic fixed-line access network on Thursday, a move that could allow the debt-laden Italian telecoms group to raise cash to fund investments.

This could also help Italy speed up broadband development and give Telecom Italia more commercial flexibility.

Telecom Italia said its board had agreed to put some of its network assets, valued 13-15 billion euros, into a separate company with a view to selling a stake in the new entity to state-backed fund Cassa Depositi e Prestiti (CDP).

"Contacts continue with Cassa Depositi e Prestiti," Telecom Italia said, without giving a timing for the possible deal.

Putting Telecom Italia's fixed-line copper and fiber network into a separate company follows political concerns over a possible tie-up with Hong Kong-based conglomerate Hutchison Whampoa.

Hutchison is targeting a majority stake in Telecom Italia in a deal that would involve merging its local unit 3 Italia into the Italian telecoms giant.

Telecom Italia and CDP have been in talks for months over a possible sale of a minority stake in the future network company but differences remain over governance issues and price, sources familiar with the issue have told Reuters.

Telecom Italia also said it would immediately inform Italy's communications regulator about the project and said the new network entity would guarantee equal access to all telecoms operators.

(Reporting By Danilo Masoni; Editing by Lisa Jucca and Jane Merriman)

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