Telecom Italia shares rise after broker upgrade

MILAN (Reuters) - Shares in Telecom Italia rose more than 5 percent in early trade on Thursday after Bank of America Merrill Lynch upgraded the Italian phone group to "buy", citing attractive prospects following the release of a new three-year plan.

The former state monopoly said on Tuesday it plans to step up spending on building out faster fixed and mobile networks in its home market as the government pushes to bring Italy's digital reach up to speed with the rest of Europe and help kick-start a flagging economy.[nL8N15V0MH]

A Milan-based trader said the upgrade helped lift the stock, which was up 3.1 percent at 0.879 euros by 0900 GMT, outperforming a 0.13 percent fall in Milan's blue-chip index <.FTMIB>.

(Reporting by Agnieszka Flak and Stephen Jewkes)