Telefonica reassures Italy over Telecom Italia's future
By Alberto Sisto
ROME (Reuters) - Telefonica Chairman Cesar Alierta has offered assurances to Italy over the future of Telecom Italia as his company tightens its grip on its Italian rival.
The Spanish telecoms group reached a deal last month to start a gradual takeover of Telco, the investment vehicle that controls Telecom Italia, prompting a backlash from some Italian politicians and trade unions concerned about national security, job losses and the pace of investment in technology.
But after a meeting with Italian Prime Minister Enrico Letta on Tuesday, Telefonica's Alierta told reporters: "Telecom Italia will remain an Italian company and Telefonica will ensure employment."
Alierta also said that his group would ensure continued investment in fibre-optics and fourth-generation mobile networks at Telecom Italia, which is battling against a debt burden of nearly 29 billion euros ($40 billion) and a deep recession in its domestic market.
Telco, owned by Telefonica and a consortium of three Italian financial groups, holds a 22.4 percent stake in Telecom Italia but effectively controls the company because it appoints the majority of its board members.
Telecom Italia's new chief executive Marco Patuano, appointed after the Telco deal was announced, is reviewing his company's strategy and will present a new business plan at a board meeting on November 7.
Earlier on Tuesday, Italy's Industry Minister Flavio Zanonato said that Italy aimed to safeguard the security of data travelling on Telecom Italia's fixed-line phone network and was not against foreign investments in Italy.
After the Telco deal was announced, Italy said it would extend its powers to veto strategic changes in the energy, transport and telecommunications sectors. It also said it would take steps to lower the threshold for obligatory takeover bids in a move that could complicate Telefonica's Italian ambitions.
On Tuesday Alierta said that he and the Italian prime minister did not discuss new takeover limits or a plan to spin off Telecom Italia's fixed-line network, Italy's biggest telecoms infrastructure, which employs about 20,000 people. ($1 = 0.7262 euros)
(Additional reporting by Giancarlo Navach; Writing by Danilo Masoni; Editing by David Goodman)
