MILAN (Reuters) - Telecom Italia will go ahead with plans to roll out an ultrafast broadband network in rural or sparely populated areas of Italy despite objections from the government, the phone group's chief executive told a newspaper on Sunday.
"Our investments have already started, we flagged them well in time and according to the law... we will press ahead," Flavio Cattaneo told La Repubblica newspaper.
The development of fast internet is a top priority for Italy's government, which last year drafted in state-controlled utility Enel to help it out after claiming Telecom Italia was dragging its feet.
Rome is currently running tenders and offering subsidies to deploy fiber in areas that would not normally be economically viable.
Telecom Italia, whose main shareholder is French media giant Vivendi, took part in the first tender but then withdrew and said it would be investing its own money in developing a network in the areas.
On Saturday cabinet minister Claudio De Vincenti told daily Corriere della Sera the government would claim damages from the phone incumbent, which had originally told Rome it was not going to invest in rural areas, forcing the state to step in.
Also on Saturday, Under-Secretary of State for the Development Ministry Antonello Giacomelli told la Repubblica that Italy would have to assess damages caused to public interests if Telecom Italia went ahead with its plan.
"The government's attack is worthy of a 'dirigiste' state. We are a private company and in Italy companies are free to do business," Cattaneo said.
Vivendi, which owns 24 percent of Telecom, also holds 28.8 percent of Mediaset, the country's biggest private broadcaster. An Italian regulator has ordered it to cut its stake in one or other of the companies.
"It seems to me Vivendi has said it intends to maintain its investment in Telecom Italia," Cattaneo said.
Asked if the group was interested in bidding for soccer rights for Italy's top-tier Serie A league, the CEO said he would wait to see what the new tender looked like.
"But in the next few days we will announce important agreements for other sports," he said.
Reporting by Stephen Jewkes, editing by Louise Heavens