Telefónica wants Telecom Italia

Spain's main telco Telefónica is "very" interested in acquiring 100% of Italy's main telco Telecom Italia in order to control it totally.

But Telefónica's board of directors are aware a full takeover will not be possible in the short term due to the opposition of Italian politicians.

Both companies hold a strategic alliance through which they get additional discounts in the acquisition of telecommunications equipment from manufacturers.

Franco Bernabè, Telecom Italia's CEO, said Telefónica's president César Alierta and the company's CEO Julio Linares "are very good managers and they can teach us something and the same happens to us towards them".

Telefónica and its Italian partners Generali, Intesa Sanpaolo, Mediobanca and Sintonia ended last October the buy out of total capital of holding group Olimpia for €4.161 million through holding company Yelco which at the same time holds 23.6% in Telecom Italia. This gives Telefónica a stake of 6.9% in the telco.

At present Telecom Italia is reestructuring its activity plan in order to cut costs through which it plans to save €1,200 million until 2010 in cost savings. This amount includes €700 million generated through its alliance with Telefónica.