* Regulator sees significant benefits for Telecom
* Investors cautious as spin-off seen taking time to
* Shares up 3.8 percent, outperform sector
By Alberto Sisto
ROME, July 9 Telecom Italia's plan to
spin off its domestic phone lines won plaudits on Tuesday from
the telecommunications regulator, who said the move was bold and
innovative and could earn the former monopoly regulatory
"The broader and deeper the separation, the more significant
the regulatory dividend," Angelo Marcello Cardani, president of
regulator AGCOM, said in his annual speech before parliament in
The board of Italy's biggest phone company approved in May a
plan to hive off its fixed-line access assets into a new
company, a move that could free up resources to cut its more
than 28 billion euros ($36 billion) of debt.
Splitting off the fixed lines would give all telecom
operators equal access to the network - a European Union
requirement - radically changing the Italian market.
Italy's biggest phone group by market share wants lighter
regulation on the spin-off plan so it can compete in the
domestic market on a level playing field.
Telecom Italia has to abide by stricter rules than rivals
Vodafone, Fastweb and Vimpelcom's Wind
because it owns the fixed-line network, and all its new
commercial offers still need AGCOM approval.
Telecom Italia Chairman Franco Bernabe said on Tuesday the
group was not asking for favours from the regulator, adding he
was confident the spin-off would benefit the country, consumers
RMJ fund manager Alessandro Frigerio welcomed Tuesday's
comments by the regulator but warned that the spin-off would
take time to complete because the issue was complex and
Bernabe has previously said he aimed for a deal with AGCOM
by early 2014. A source close to the situation
has said the separation could take up to 18 months to complete.
Telecom Italia's access network, estimated to be worth
between 12 billion and 15 billion euros, links millions of
users, from private citizens to government agencies, banks and
Earlier in June Telecom Italia ended talks with Hutchison
Whampoa on a possible tie-up, preferring to focus on
the spin-off, which could pave the way for a sale of a stake in
the network firm to state-backed fund Cassa Depositi e Prestiti.
Shares in Telecom Italia rose 3.8 percent to 0.54 euros at
1424 GMT, outperforming a 0.2 percent gain in the European
telecoms index. The stock was close to a 16 year low
reached in mid-June.