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Telecom Italia considers integration with H3G

Q1 profit 364 million euros, 40% below 2012

08 May, 20:30
Telecom Italia considers integration with H3G (ANSA) - Milan, May 8 - Italy's largest telecommunication provider Telecom Italia agreed in a board meeting Wednesday to continue to discuss potential "integration" with Hong Kong conglomerate Hutchison Whampoa.

Telecom Italia (TI) ended the first quarter of 2013 with a net profit of 364 million euros, down about 40% from its 605 million euro profit reported in the same period last year, the Milan-based company announced. Revenue was down 8.1%, to 6.79 billion euros compared with the 7.39 billion euros reported during the same period one year earlier. The Italian market was hit especially hard, as revenues at home fell by 10.1% from the previous year.

Last month, Telecom Italia shares surged on Milan's financial markets after it announced that Hutchison wanted a controlling stake in the Italian company.

At that time, TI's board appointed a committee, led by Chief Executive Officer Franco Bernabe, to explore a possible linkup with the Hong Kong company.

That would include an examination of financial results, Bloomberg reported.

However, a deal hinges on Hutchison gaining control of TI's assets, which seems unlikely at present since Telecom Italia controls the country's fixed-line telephone network, which is considered a strategic national asset. Still, TI officials have said they are looking into ways to spin off the fixed-line network in order to meet Hutchison's demands.