July 2, 2014 / 9:56 AM / 3 years ago

Telecom Italia keen to hold onto TIM Brasil stake -report

MILAN, July 2 (Reuters) - Telecom Italia is in favour of keeping its controlling stake in Brazilian unit TIM Participacoes because it supplies one third of its group revenue, but it does not rule out a sale, Chairman Giuseppe Recchi told Il Sole 24 Ore.

Recchi said TIM Brasil, the second-biggest mobile operator in the growing emerging market after Telefonica’s Brazilian unit, gave the Italian phone company access to 70 million clients.

“Selling, for everyone, is always an option; it depends on the price,” Recchi told the paper in an interview published on Wednesday. “For us (TIM Brasil) is a source of one third of our revenues, it’s strategic.”

Telecom Italia could not immediately be reached for comment.

Recchi’s comments echo those of CEO Marco Patuano who has repeatedly said that the Brazilian unit was not up for sale.

The Brazilian authorities have been concerned about competition in the local market as Telefonica is also a shareholder in Telecom Italia.

Brazil’s competition watchdog Cade ruled in December that Telefonica must exit its direct and indirect stake in TIM Brasil or reduce its stake in local mobile network operator Vivo , which it controls.

The regulatory decision was taken after Telefonica agreed with a group of Italian financial investors to increase its own stake in Telecom Italia to almost 15 percent.

Recchi dismissed the possibility that the dispute could result in Telecom Italia being forced to sell TIM Brasil.

“I see the probability of such scenario as close to zero,” he said.

Recchi also played down speculation the group might encounter problems in completing the $960 million sale of its Argentinian unit, which is still waiting for approval from Argentinian regulators.

“We have not yet arrived at the (August) deadline,” he said, referring to a timeline defined in the contract and added that the company was “confident” about completing the sale. (Reporting by Agnieszka Flak, editing by Louise Heavens)

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