(Fixes typographical error in headline)
By Stephen Jewkes and Agnieszka Flak
MILAN, March 28 Telecom Italia is
working with Rothschild to help it to find a partner to fund
part of its broadband business in Italy, three sources close to
the matter said on Tuesday.
The former Italian phone monopoly said last week that it
would set up a special company to develop its ultrafast
broadband network to include areas of the country that would not
normally be economically viable.
The company intends to speed delivery of a fibre broadband
network across Italian towns and cities but has said it will not
participate in tenders launched by the state to attract
investment in underdeveloped areas.
Those tenders are being reviewed by European Union antitrust
regulators after Telecom Italia asked the watchdog to look into
a possible breach of EU state aid rules.
Telecom Italia, 24 percent owned by French media giant
Vivendi, said last week that it is seeking a financial
partner as majority shareholder in its new business in the
Rothschild has no official mandate from Telecom Italia, one
of the sources said, but the adviser has begun to test the
market. A second source said that initial approaches were made
to potential investors last week.
Telecom Italia shares were little changed at 0.85 euros at
Daily newspaper Il Sole 24 Ore reported on Tuesday that
Rothschild had identified about 20 interested parties and that a
partner for Telecom Italia would be found by the summer.
Italian infrastructure fund F2i, which used to control
Milan-based broadband company Metroweb, is one of the parties
asked to look at the business, a third source said.
The development of a broadband network is a top priority for
Italy's government, which is looking to upgrade the country's
phone and Internet infrastructure to support business.
Rome has enlisted the help of state-controlled utility Enel
to use its pipes and pylons to lay fibre-optic cables
throughout the country.
Enel has said it is open to investment funds and financial
partners to help it to bankroll its Open Fiber unit, which is
partly owned by state lender Cassa Depositi e Prestiti.
(Editing by David Goodman)