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MILAN, July 15 (Reuters) - Telecom Italia said onMonday it wanted to secure favorable regulatory conditionsbefore taking any steps forward in its plan to spin off itsfixed-line network after the local regulator cut tariffs itsrivals pay to access the grid.
"The company's board acknowledged that the uncertaintiesintroduced by recent decisions taken by AGCOM might affect thefeasibility" of the spinoff, the Italian phone company said in astatement late on Monday following an extraordinary boardmeeting.
Telecommunications regulator AGCOM on Thursday tentativelyapproved lower fees for rivals who rent space on TelecomItalia's fixed-line copper network, sparking criticism fromTelecom Italia, but plaudits from competitors like Vodafone which does not own fixed lines.
Telecom Italia was pondering its options, including whetherto halt the spinoff, a source familiar with the matter toldReuters on Monday.
A failure for the project would be another setback forChairman Franco Bernabe's efforts to revive the debt-ladengroup, following the collapse earlier this month of tie-up talkswith Hutchison Whampoa.
Telecom Italia's board in May approved a plan to separatefixed-line access assets into a new company, a move that couldfree up resources to cut its more than 28 billion euros ($36.5billion) of debt.
The project would take several months to complete, thecompany said at the time.
Telecom Italia has said the fee cut decided by the AGCOMjeopardizes the planned spinoff of the network and would reduceits annual income by 110 million euros.
AGCOM plans to reduce the local loop unbundling (LLU) feesby 6.5 percent to 8.68 euros ahead of a broader regulatoryreview for the three years to 2016.
The ruling will be reviewed by European authorities andAGCOM will take a final decision well before the end of theyear.
Lower line rental charges would diminish the value of theTelecom Italia's fixed network, making the new company to bespun off potentially less attractive to outside investors.
Italy's state-backed investment arm, the CDP, has been intalks with Telecom Italia for months over taking a stake in thenetwork company.
