Telecom Italia was reported by the Financial Times saying that it had no intention of selling its Brazilian assets, insisting that Brazil was one of two core markets, alongside Italy.
it would cut 4,000 jobs in Italy, in addition to the 5,000 it has already announced, and sell other assets to raise cash.
Telecom Italia, has €35 billion (US$44 billion) of net debt and was expected to announced its withdrawal from Brazil by analysts.
Franco Bernabè, CEO, admitted that the telecoms group - one of Europe's top five operators - was "a difficult business in a difficult environment".
As the FT pointed out, despite Bernabè's confident performance in the phone interview, after almost exactly a year at the operator's helm, shares in Telecom Italia closed down 1.6 per cent at €1.03.
Selling off €3 billion in non-core assets and shedding jobs are fundamental to Bernabè grand plan of saving €2 billion over the next three years.
Telecom Italia has said it expects to generate free cash flow of €22 billion between 2009 and 2011, and that it will consolidate its equity stake in Telecom Argentina with a local partner.