AT&T open to Italian partners in Telecom - report

Thu Apr 5, 2007 3:18am EDT

(Adds details, background)

MILAN, April 5 (Reuters) - AT&T (T.N) is open to Italian partners in Telecom Italia (TLIT.MI), where it is discussing a stake in the controlling shareholder, the U.S. phone giant's corporate development head told a newspaper.

"We are absolutely ready to take into consideration the interests of Italian industrial and financial partners," Rick Moore, managing director for corporate development at AT&T, told Corriere della Sera newspaper in an interview published on Thursday.

He did not elaborate.

AT&T is in exclusive talks alongside Mexico's America Movil (AMXL.MX) with Italy's Pirelli (PECI.MI) about buying a majority stake in holding company Olimpia, which controls Telecom Italia with an 18 percent stake.

The U.S. approaches have turned up the volume in a domestic debate over protectionism, with the head of the biggest party in Italy's centre-left coalition government calling for the fixed-line network to stay in Italian hands.

"There's no reason to think that Telecom would lose its Italian identity ... we want to establish a strong collaboration with Telecom for a long-term industrial strategy," Moore said.

Italian banks including Mediobanca (MDBI.MI) and Intesa Sanpaolo (ISP.MI) have been working on an alternative way of buying Pirelli out of Olimpia, where it has 80 percent.

Olimpia has ditched Guido Rossi as chairman in its proposals for Telecom's board, prompting Mediobanca and Generali (GASI.MI) to call for an emergency meeting of key investors in Pirelli, which is headed by Marco Tronchetti Provera.

Moore said if Olimpia put forward Pasquale Pistorio, who headed STMicroelectronics (STM.MI)(STM.PA) until 2005, as the new chairman of Telecom Italia, it would be "an excellent choice".

Analysts have said Pistorio is a likely choice for Olimpia to replace Rossi, who had opposed Tronchetti over strategy.

Moore added that "ours is a growth strategy," and that "Telecom workers have no reason for concern," when asked about possible job cuts.

((Reporting by Jo Winterbottom, Editing by David Cowell and Erica Billingham; Milan newsroom +39 02 66129 507, fax +39 02 801 149, milan.newsroom@reuters.com)) Keywords: TELECOMITALIA AT&T/ . Keywords: TELECOMITALIA AT&T/

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