PARIS, March 1 (Reuters) - France's Orange andItaly's telecom operator Telecom Italia have beendiscussing a possible alliance between the former monopolies,Orange's chief executive told the Journal de Dimanche.
"There are no negotiations ongoing just exchanges of pointsof view between the two management teams," said Orange's CEOStephane Richard.
"It would be an attractive European consolidationopportunity."
A spokesman for the heavily indebted Telecom Italia saidthere had been no talks over a possible tie-up with Orange.
A period of consolidation has been underway in the Europeantelecoms sector for the past two years as companies fromVodafone to Hutchison seek to bulk up tocompete and serve smartphone-toting customers with ever-fasterbroadband speeds.
The spate of deals so far have taken place within nationalmarkets and not across borders because the former create rapidand large cost savings. But European policy makers hope thateventually the emergence of regional champions will occur viacross-border consolidation.
Richard seemed confident Orange would be able to convincethe French government, which has a 25 percent stake in theoperator, of the value of a cross-border deal.
"The state will agree to slightly loosen its grip for Orangeto do a major transaction," he told the weekly newspaper.
A spokesman for Orange did not immediately return a requestfor comment. (Reporting by Sybille de La Hamaide and Gwenaelle Barzic inParis, and Danilo Masoni in Milan; Editing by Leila Abboud andElaine Hardcastle)
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