Telecom Italia Says It’s Obliged to Explore Brazil Opportunity

Telecom Italia SpA Chief Executive Officer Marco Patuano said that while keeping the phone company’s Brazilian business remains the preferred option, the carrier would look at “any good opportunities” in the country.

“It’s mandatory for Telecom Italia to explore any good opportunities in Brazil,” Patuano said today during a conference call with analysts, when asked about a possible deal with Oi SA, Brazil’s largest landline carrier. “But what’s not mandatory is reaching a deal, because we are not desperate and financial discipline is our North Pole.”

Oi is working with Banco BTG Pactual SA to evaluate a possible bid for Telecom Italia’s stake in Tim Participacoes SA, Brazil’s second-largest wireless carrier. Milan-based Telecom Italia owns 67 percent of Tim, which has a market value of 31.8 billion reais ($12.5 billion).

As part of its defense strategy, Telecom Italia is weighing a potential acquisition of Oi by Tim, people familiar with the matter said in September.

“Telecom Italia’s plan A is remaining in Brazil,” Patuano said. “We are investing in a high-growth country, we are very committed. Of course everything has a price.”

Telecom Italia expects to reach an agreement on the sale of its mobile-phone towers in Brazil by the end of this year, Chief Financial Officer Piergiorgio Peluso said on the call.

Tim shares were little changed at 13.12 reais at 1:10 p.m. in Sao Paulo. Oi climbed 1.7 percent to 1.22 reais.

Telecom Italia dropped 0.9 percent to 87 euro cents in Milan. Italy’s largest carrier today reported an 8 percent decline in third-quarter earnings before interest, taxes, depreciation and amortization. Revenue decline slowed during the period as broadband-customer gains helped the company offset shrinking phone bills.