Italy PM Reiterates Not Informed Of Telecom Italia Plan

MILAN -(Dow Jones)- Italy's Prime Minister Romano Prodi Thursday reiterated he wasn't informed of Telecom Italia's reorganization plan.

Prodi told the Italian Senate that in his talks with former Telecom Italia Chairman Marco Tronchetti Provera he was only told about a possible partnership with Rupert Murdoch's News Corp.

"I reiterate here what I've already said before, that I was never informed of any plan on Telecom Italia," Prodi told the Senate, repeating a similar speech he gave before the lower house of parliament last week.

Tronchetti Provera, who resigned from his post after clashing with Prodi and the center-left government over the future strategy of the Italian former monopoly, hit back at Prodi Wednesday contradicting the Italian prime minister and accusing him of lying.

In an interview with the Financial Times Tronchetti Provera said that there was "no doubt" that Prodi had been told that a sale of Telecom Italia mobile assets was possible.

On Sept. 11, Telecom Italia announced a reorganization plan which reversed the company's previous strategy of convergence and revealed plans to split its fixed-line and mobile businesses in two.

At that time Tronchetti Provera stopped short of saying the company was considering selling mobile unit TIM, but the strategy shift prompted a furious response from the center-left administration, with Prodi joining critics opposing the move as a precursor to the sale of mobile assets.

As the row blew up last month, Prodi disclosed publicly that during talks with Tronchetti Provera over the summer the latter had said he had discussed deals with media group News Corp. which went beyond media content.

Prodi reiterated on Thursday he was only informed by Telecom Italia's management about "a possible partnership" with Murdoch.

The affair has put Prodi on the defensive at a difficult time for his fragmented centre-left coalition. His closest aid was forced to resign after a plan proposing Telecom Italia's partial renationalization leaked on the Italian press.

In his speech before the Senate Italy's prime minister rejected again accusations of meddling in Telecom Italia's businesses.

He repeated the government planned to draw a lesson from the Telecom Italia controversy by reinforcing the authority of independent regulators who supervise sectors such as telecommunications and media.

Prodi's speech at the Senate, which received a lukewarm reaction by his majority and was booed by the centre-right opposition. This followed a much more rowdy appearance at the lower house of parliament last Thursday, which had to be suspended after heckling from opponents interrupted him nine times.

-By Giada Zampano, Dow Jones Newswires; +39 02 58219907; giada.zampano@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 5th October 2006