Orange says is not in discussions with Telecom Italia

Orange said it is not involved in talks with Telecom Italia nor has any particular target in mind, as the France-based operator attempts to quell mounting speculation about its future expansion plans.

Ongoing rumours that Orange is considering a potential combination with Telecom Italia or another European operator were further fuelled this week by a Bloomberg report, which said the operator was working with advisers to explore options for an expansion in Europe in general and was interested in the Italian incumbent in particular.

However, Orange has said it is not in talks with Telecom Italia, although it emphasised that it continually reviews how the market in Europe might develop over time.

"We have a strategy and finance department who work with investment banks looking at our vision of how the European telecoms market might evolve in five to 10 years' time should the single market in Europe become a reality. Today, for Orange, there is no specific target that has been identified and no on-going discussions with Telecom Italia," a company spokesperson said in comments emailed to FierceWireless:Europe.

Marco Patuano, Telecom Italia CEO, told Reuters that he had not had any contact with Orange or any other telecoms operator interested in a consolidation at European level.

Reuters also cited unnamed sources that said Orange had hired investment banks Morgan Stanley and BNP Paribas to assess possible deals with other network operators in Europe.

Bloomberg noted that a combination of Orange with Telecom Italia would face a number of hurdles, however, and would also represent Orange's largest deal in 15 years. The Italian operator has a market value of about €23 billion ($24 billion) and debt of almost €27 billion.

Furthermore, entrepreneur Xavier Niel -- one of Orange's fiercest rivals on the French market -- and Vivendi are now major investors in Telecom Italia and would probably need to approve any deal, Bloomberg noted.

For more:
- see this Bloomberg article
- see this Reuters article
- see this separate Reuters article

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