Telecom Italia denied on Monday it was in talks with Qatari funds to sell a stake in its fixed-line business after it completes a planned spin-off, saying a media report as such was groundless.
The board of Italy's biggest phone company last month approved a plan to hive off its fixed-line network assets into a new company, a move that could raise cash and trigger a regulatory overhaul.
The Financial Times reported on Monday that Telecom Italia "has held discussions with Qatari funds about taking a stake in its spun-off fixed-line business," citing two people with knowledge of the situation.
"The report is groundless," a company spokesman told Reuters.
The separation of the network, which has an estimated value of 13-15 billion euros ($17.4-20.1 billion), could pave the way for a sale of a stake in the newly-created network company to state-financed agency Cassa Depositi e Prestiti (CDP).
Italy's Industry Minister Flavio Zanonato is in favor of CDP taking a stake in strategic industries, he reiterated in an interview with daily newspaper Corriere della Sera on Monday.
The spin-off could take up to 18 months to complete.
Telecom Italia has put unrelated talks about a potential tie-up with Hutchison Whampoa on hold while it focuses on the network spin-off.
The board of the Italian company, which meets on Thursday, will acknowledge that talks with Hutchison are stalling, daily Il Sole 24 Ore said on Sunday, giving no details of its sources.