ROME, June 3 (Reuters) - A top official at Italy's industryministry floated on Monday the idea of single national networksfor mobile and for fixed telecommunications, as competitionweighs on the industry.
"Increasingly tough competition is squeezing operators. Wemust consider (the idea of setting up) single networks for bothfixed and mobile (telephony)," said Roberto Sambuco, head of theIndustry Ministry's Communications department.
Telecom Italia's board last week approved a plan to spin offits fixed-line network into a separate company, with a view toselling a stake in the new entity to the state-backed fund CassaDepositi e Prestiti (CDP). Several sources including a seniorpolitical source say the debt-laden firm is also consideringspinning off its mobile unit to bring new investors on board.
Sambuco's remarks made clear that the government wasdebating the issue.
"The model of liberalisations drawn up in the 1990s is incrisis," he told a conference in Rome.
CDP Chairman Franco Bassanini said he agreed with the ideaof single national networks.
But creating them would not be easy, and could involveTelecom Italia's rivals such as Vodafone Italia,Swisscom's broadband unit Fastweb and Wind, the localmobile unit of Russia Vimpelcom.
Telecom Italia, formerly the Italian phone monopoly, isbattling a recession at home that is squeezing its margins andendangering its targets, putting its credit ratings at risk.
As consumers and businesses cut spending, the idea ofsharing the costs of running networks may also become moreattractive to its competititors.
Last month Telecom Italia Chairman Franco Bernabe metItalian Prime Minister Enrico Letta to discuss plans to spin offthe fixed-line network, which employs about 20,000 people.
Vodafone (VOD)
