August 3, 2017 / 5:15 PM / 2 years ago

Italy economy minister sees gains from Telecom Italia network spin off

FILE PHOTO: A Telecom Italia tower is pictured in Rome, Italy, March 22, 2016. REUTERS/Stefano Rellandini/File Photo

ROME (Reuters) - There would be clear advantages to spinning off Telecom Italia’s (TLIT.MI) fixed-line network, Economy Minister Pier Carlo Padoan said on Thursday, without clarifying whether the government was planning such a move.

Rome is locked in a tussle with Paris, which has blocked Italian state-owned Fincantieri (FCT.MI) from taking a majority stake in STX France shipyards.

Earlier this year, French media group Vivendi (VIV.PA) took control of Italy’s main telecom provider Telecom Italia (TIM) and some politicians have suggested the government should strike back at France by nationalising TIM’s fixed-line network.

“The spin-off of the network from the supplier of services to that network is a very general issue, which is well-known,” Padoan told Sky Italia TV when asked whether a spin-off was in the offing and whether it was a good idea.

“It is a mechanism which boosts efficiency and competition and should thus be done where possible,” Padoan said, giving no further details.

TIM’s fixed-line network is estimated by some analysts to be worth up to 15 billion euros ($17.72 billion) and its purchase by the state has been mooted in the past.

Vivendi’s CEO Arnaud de Puyfontaine, who is also temporarily in charge of Telecom Italia, told reporters last week the idea of separating the network was “interesting”, but added it was not part of his company’s business plan.

Italian and French ministers met on Tuesday to discuss the STX France and gave themselves until Sept. 27 to find a solution, with Rome adamant that Fincantieri must take a controlling stake in STX. Paris has suggested shared ownership.

“The Italians know how to count very well and 50-50 will not be accepted,” Padoan said.

Reporting by Crispian Balmer; Editing by Adrian Croft

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