January 8, 2018 / 2:33 PM / a year ago

Telecom Italia shares rise after minister reiterates network should be separated

Telecom Italia new logo is seen at the headquarter in Rozzano neighbourhood of Milan, Italy, May 25, 2016. REUTERS/Stefano Rellandini/File Photo

MILAN (Reuters) - Telecom Italia (TIM) (TLIT.MI) shares moved higher on Monday after Italy’s Industry minister reiterated that the group should split off its landline network, a trader said.

TIM is under pressure from Italian politicians, regulators and rival firms to separate and upgrade its network, an asset analysts have valued at up to 15 billion euros (13.26 billion pounds).

The pressure has intensified since Vivendi (VIV.PA), which has a 24 percent stake in TIM, began to exert greater influence, raising concerns within the Italian government.

Carlo Calenda reiterated in an interview with Bloomberg TV that TIM should unbundle its network and services operations into two separate legal entities.

TIM Chief Executive Amos Genish said in November TIM wanted to keep control of the network, TIM’s most prized asset, but didn’t need to own it in full, adding the company would make a decision “on our terms when we really believe it’s needed”.

According to a person familiar with board proceedings, Genish will make his recommendation on whether to separate the network at a later stage, probably at the next board meeting in March when a 2018-2020 business plan will be presented.

Calenda also said he thought it would be wise to reduce a potential fine TIM may be required to pay for not notifying the government Vivendi had effectively acquired control.

At 1415 GMT TIM shares were up 2.1 percent.

Reporting by Andrea Mandala, writing by Stephen Jewkes

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