TI rejects all offers for TIM Brasil as Telefónica shows interest

19 Feb 2007

Telecom Italia (TI) says it has rejected out of hand all offers for its Brazilian unit, TIM Brasil, which it considers a ‘strategic asset’ that is not for sale. The Italian communications giant’s board met last Friday to approve a new organisational structure and a report on security issues, but also tackled the question of Telefónica’s possible interest in acquiring an indirect interest in TI. The Spanish telco has surfaced as the main contender to acquire a stake in TI holding company Olimpia, which is being offered for the sale by the Pirelli group. Italian newspaper Il Corriere della Sera has reported that Pirelli wants to offload between 12% and 14% of Olimpia, a company which has an 18% interest in Italy’s dominant wireline and wireless operator. Although Telecom Italia may not welcome the interest of the foreign firm, a link between the two telcos could generate synergies of EUR1 billion a year, AFX reports. Industry watchers believe TI’s decision to hang on to TIM Brasil – Brazil’s second largest mobile operator by subscribers – could be a hint that the Italian giant is looking to develop synergies with Telefónica in Brazil, where both operators have an active presence.

Meanwhile, the TI board has given its go-ahead to a restructuring under which the group will be separated into four divisions: domestic fixed services; domestic mobile services; top clients & ICT; and technology.