Sept. 7 (Bloomberg) -- Telecom Italia Director Gabriele Galateri, whose company is seeking to recover from financial losses and a stock slide, said the European telecommunication industry is in need of consolidation.
Galateri’s comments to reporters today in Cernobbio, Italy, came amid uncertainty over the future role of Telecom Italia’s controlling shareholders. Spain’s Telefonica SA and three financial investors own almost 22.5 percent of Milan-based Telecom Italia through holding company Telco SpA. Their partnership is up for review this month, when members are allowed to exercise a right to end the collaboration.
Galateri was asked today if a merger of equals between Telecom Italia and Telefonica was possible.
“You’re putting many things together, a merger with Telefonica, a merger of equals,” said Galateri, who is also chairman of Assicurazioni Generali SpA, a Telco partner. “The European market needs consolidation. It’s definitely a desirable goal. Beyond which, whether it is possible or not possible depends on many factors. We’ll see.”
Telecom Italia’s stock price has declined every year since 2005 and is down 11 percent since Dec. 31. The company reported a 1.77 billion-euro ($2.33 billion) loss in the second quarter and a 3.55 billion-euro loss in the fourth quarter.
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