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MILAN, March 23 (Reuters) - Telecom Italia is looking for a partner to help fund its broadband business in non-economically viable areas of Italy as it gears up to compete with utility giant Enel.
In a statement on Thursday, Italy's biggest phone group said it would set up a new company to develop the business and would choose a financial partner as majority shareholder in the coming months.
"Creating this partnership will mean ... TIM will be able to achieve its targets to cover the country with ultra-broadband almost two years ahead of schedule," it said.
The development of a broadband network is a top priority for Italy's government which is looking to upgrade the country's phone infrastructure and support business.
Rome, which is running tenders to deploy networks in the so-called "white" areas that would not normally be economically viable, has enlisted the help of state-controlled Enel to use its infrastructure to lay fibre-optic cable.
Last year Enel set up OpEn Fiber and said it was open to investment funds and financial partners to help bankroll the business.
Telecom Italia, 24 percent owned by French media giant Vivendi, has pledged to spend 5 billion euros ($5.4 billion) over the next three years to speed up its ultrafast broadband (UB) rollout.
The company said that by setting up a separate company with a financial partner, its target of a 95 percent UB coverage would be achieved in mid-2018. Coverage would increase to 99 percent in 2019, it said.
Also on Thursday, Telecom Italia said it had swung to a net profit of 1.8 billion euros in 2016 from a net loss of 70 million euros the previous year, when it was hit by one-off items.
The phone incumbent gave preliminary 2016 numbers and its 2017-2019 business plan in February. ($1 = 0.9272 euros) (Reporting by Stephen Jewkes; Editing by Alison Williams)