Telefonica may stay out of Telecom Italia's Brazil votes -TIM CEO


RIO DE JANEIRO, Oct 23 (Reuters) - Telecom Italia SpA may suggest to Brazilian regulators that keyshareholder Telefonica SA continue to refrain fromdecisions involving its Brazilian unit, TIM Participaçoes SA, TIM's CEO said on Wednesday.

As Spain's Telefonica has increased its stake in TelecomItalia, questions have resurfaced about how the two phonecompanies can be running rival businesses in Brazil.

TIM Participaçoes CEO Rodrigo Abreu told reporters in Rio deJaneiro that one solution would be to extend the 2007 agreementfor Telefonica's representatives on the Telecom Italia board torefrain from voting on decisions related to Brazil.

The proposal highlights sensitive antitrust issues inBrazil, where officials have protested the idea of a mergerbetween the country's two biggest mobile carriers, TelefonicaBrasil SA and TIM.

Telecom Italia is also considering a sale of its 67 percentstake in TIM, a person familiar with the matter told Reutersthis month. However, Abreu has vigorously denied that a processto sell TIM is under way.


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