Telecom Italia posts 3.5% earnings increase

Telecom Italia reported that its profit in the latest quarter grew 3.5%, beating analysts' expectations, and confirmed it was evaluating the sale of its Brazilian mobile operations, an Associated Press report said.

The Associated Press report said Italy's largest telecommunication company said it received a 'very recent, unsolicited' acquisition proposal for Tim Participacoes.

Telecom Italia said it has mandated senior management to negotiate a possible sale, but it did not say who made the approach.

In a statement, Telecom Italia said an eventual sale of Tim Brasil would ensure the financial stability needed by Telecom Italia to pursue its strategy and upgrade its network.

On a conference call with analysts, Telecom Italia CEO Riccardo Ruggiero declined to say who the bidder was or how much had been offered for Tim Brasil.

The Rome-based telephone company said it earned 880 million euros ($1.12 billion) on revenue of 7.77 billion euros ($9.99 billion) in the third quarter.

Revenue in the latest quarter was mainly driven by its European broadband and Brazilian mobile businesses, the company said.

The company said its debt narrowed to 39.5 billion euros ($50.25 billion) in the quarter, a decrease of about 1.8 billion euros from 41.3 billion euros as of June 30.

The decline in debt was mainly due to cash generation in the third quarter.