Italy seeks phone network security after Telefonica deal - minister

FERRERA ERBOGNONE, Italy (Reuters) - Italy wants to safeguard the security of data travelling on Telecom Italia's phone network, Industry Minister Flavio Zanonato said on Tuesday, as Spain's Telefonica increases its grip over its Italian rival.

Last month the Spanish group reached a deal to next year start to take over Telco, an investment vehicle owned by Telefonica and three Italian financial groups which controls Telecom Italia with a 22.4 percent stake.

"The problem is guaranteeing the security of data travelling on the network," Zanonato said on the sidelines of an event. "We don't want to give contradictory signals on this. We are interested that (foreign) investors come in Italy."

Italy's Prime Minister Enrico Letta and Telefonica Chairman Cesar Alierta are meeting later on Tuesday to discuss the Spanish group's plans in Italy.

The meeting comes as Telecom Italia prepares a new business plan which it will present to the board on November 7.

The prospect of Telecom Italia falling into Spanish hands has angered some Italian politicians and trade unions concerned about national security, job losses and the pace of investment.

Telecom Italia's fixed-line network is Italy's biggest telecoms infrastructure and employs about 20,000 people.

Following the Telco deal, Italy said it would extend its powers to veto strategic changes in the energy, transport and telecommunications sectors. It also took steps to lower the threshold for obligatory takeover bids sometime soon, a move that could complicate Telefonica's ambitions regarding Italy.

(Reporting by Giancarlo Navach; Writing by Danilo Masoni; Editing by David Holmes)