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Telecom Italia: Berlusconi seeks stake, Reding rattles sabre

20 Apr 2007

Former Italian leader Silvio Berlusconi said yesterday that his Mediaset media empire would consider investing in Telecom Italia (TI) to help keep it in Italian hands, but would not seek to take control of the incumbent telco, the Italian news agency ANSA reported. ‘We are available to do our part to defend the Italianness of such an important company, but as part of an action with other investors. We don’t want to take control,’ Berlusconi was quoted as saying. On Wednesday Mediaset denied it was in talks to take a stake in TI, or in Olimpia, but yesterday Mediaset Chairman Fedele Confalonieri said that the group is ‘obviously interested in Telecom Italia,’ comments later echoed by Berlusconi. Confalonieri added, however, there are regulatory hurdles that would prevent Mediaset, which already owns three television channels, from acquiring a controlling stake in TI, whose media unit controls two TV stations. ‘We could be involved [in a TI deal] only with a non-controlling stake.’

Meanwhile European telecoms commissioner Viviane Reding has been growling about the Italian government’s plans to introduce new telecom legislation to ‘force the breakup’ of TI, at a time when foreign investors were planning to take a stake in the incumbent. Earlier this week American telecoms giant AT&T withdrew from talks to acquire a stake in Olimpia, the unlisted holding company that controls TI with an 18% stake, from Pirelli & C SpA. The withdrawal came amid concern from Rome about the former monopoly falling into foreign hands, raising speculation about possible Italian investors stepping forward. However, Pirelli is still talking with AT&T’s Mexican affiliate, América Móvil, which had been negotiating to buy a two-thirds share with AT&T. Reding believes ‘there are still protectionist pressures in member states [of the EU] that affect the telecommunications sector.’ Italian Telecom Minister Paolo Gentiloni has previously assured Reding that, ’the legislation currently envisaged in Italy would be made fully compliant with EU law.’ Despite these assurances, Reding said the commission must prepare ‘for the moment when the legislative proposals in Italy become more concrete and …. to respond with a clear and timely Commission position if needed. Above all, we must ensure that this form of regulation is not influenced by protectionist tendencies that hobble investment.’

Italy, America Movil (AM), AT&T, Telecom Italia (TIM)

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