In the wake of fresh press rumours over a possible sale plan, Telecom Italia (TI) has come out fighting by saying it has no plans to sell its Brazilian fixed and mobile unit TIM Participacoes (TIM Brasil). Brazil’s regulatory authorities are growing concerned that competition in the local market could be jeopardised by Telefonica of Spain’s recent move to increase its stake in TI. The Madrid-based giant is one of the Italian firm’s biggest rivals in Brazil via its Telefonica Brazil (Vivo) subsidiary.
With speculation refusing to go away despite TI’s repeated denials that it is not looking to divest TIM Brasil – a key ‘strategic asset’ – the Italians published a statement yesterday following a request from Italy’s market regulator Consob. The statement read: ‘Telecom Italia wishes to make clear that the rumours of presumed plans for the deconsolidation and/or total or partial valuation of the Brazilian asset, described and repeated by journalists, pundits and analysts are inferences wholly without foundation’.
In September this year Telefonica agreed a deal to raise its stake in Telco Holding, an investment vehicle jointly controlled by itself and a number of Italian financial groups; Telco controls TI with a 22.39% stake and controls its board. Some unconfirmed sources claim the Madrid firm would ‘seek a sale or break-up’ of TIM Brasil from the middle of next year. TI holds a roughly 67% stake in the Brazilian unit via TIM Brasil Servisos e Participacoes. Matters were not helped when last month, Telecom Italia chief executive Marco Patuano said that the group is not counting out any options where it concerns TIM Brasil, including its disposal, as the Italians explore ways of paying down debt and improving its competitive position. In a clearest hint yet that the sell-off of TIM Brasil could simply be a matter of time in coming, Mr Patuano refused to discount the disposal of the unit, which accounts for roughly 25% of the Italian group’s revenue, despite earlier statements dismissing such a notion.