• Submitted by: manso
• Business and Economy
• 01 / 31 / 2011

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Published January 31, 2011. Dow Jones Newswires. ROME -(Dow Jones)- Telecom Italia SpA (TI), Italy's largest telecommunications company, Monday said it has sold its 27% stake in Cuba telecoms operator Etecsa for $706 million to Cuban company Rafin, continuing a reorganization that aims to cut
debt and refocus its operations.

"This deal completes the sales process, reaching the targets set three years ago," said Telecom Italia Chief Executive Franco Bernabe.

He said a new phase now starts for the Italian operator, which will focus on "Brazil and Argentina operations, with a strong expansion potential."

The sale of the Etecsa stake, which was widely expected, is the latest in a series of measures under Bernabe's 2010-2012 industrial plan to reduce Telecom Italia's debt pile and to focus on growth markets in Argentina and Brazil and its domestic operations.

In August, Telecom Italia reached a deal with the Werthein Group to increase its stake in the company that controls Telecom Argentina (TEO) to 58% from 50%, leaving the Werthein Group with 42%. The deal ended more than a year of acrimony between the Italian company and its local partners.

In Brazil, a huge growth market for telecoms, stronger sales and an increase in higher margin traffic helped Telecom Italia deliver a 24% rise in overall earnings before interest, tax, depreciation and amortization in the first nine months of this year.

The company's closely-watched net debt reached EUR32.99 billion at the end of September, moving toward Bernabe's target to slash it to EUR29.5 billion by 2011.

Source: Dow Jones Newswires