2nd UPDATE: Italy's Antitrust Body To Probe Telecom Italia

24th Jun 2010 15:44

(Adds company response, background) By Christopher Emsden Of DOW JONES NEWSWIRES ROME (Dow Jones)--Italy's Antitrust Authority said Thursday it was opening a probe into allegations Telecom Italia SpA (TI) was abusing its dominant position in the nation's telecommunications market. The charges were brought by rivals Fastweb SpA (FWB.MI) and Wind SpA, the competition regulator said on its website. Both companies reported that Telecom Italia has engaged in anti-competitive practices by refusing or delaying to activate new clients, as well as offering sharp discounts for business clients. In a statement released later, Telecom Italia called the allegations "groundless" and said it "trusts" it will demonstrate to the regulator that it acted in full compliance with the rules. At 1433 GMT, Telecom Italia shares are down EUR0.01, or 1.1%, to EUR0.95. Telecom Italia, the country's incumbent operator, controls Italy's national telecommunications network, but is obliged to unbundle final connections to allow rivals to compete. Wind says connection refusals have been anomalously high among its applications for them, the Antitrust Authority said. Both Wind and Fastweb have claimed that Telecom Italia is engaging in "discriminatory behavior" in offering "notably differentiated prices" for business clients in areas not subject to unbundling rules. Discounts offered can be up to 69%. The antitrust investigation comes at a time when Telecom Italia is facing pressure to join forces with other telecommunications companies, including Vodafone Group PLC's (VOD) Italian business, as well as Wind and Fastweb, to pool resources and create a national fiberoptic broadband network. The government is brokering a first dialogue between high-level executives of all the companies later Thursday. Earlier in the day, telecommunications executives met with labor union leaders to discuss ways to overhaul contract types and industrial relations in the sector. All parties agreed that a new-generation broadband network was a national priority and called for the government and regulators to push for a viable solution. -By Christopher Emsden, Dow Jones Newswires; +39-06-6976-6921; [email protected] (END) Dow Jones Newswires June 24, 2010 10:44 ET (14:44 GMT)