Da Dow Jones Newswires. Italy Consumer Group Calls On Government To Block TIM Sale

Italy Consumer Group Calls On Government To Block TIM Sale MILAN -(Dow Jones)- Italian consumer group Adusbef Wednesday called on the Italian government to use its "golden share" to stop Telecom Italia's mobile-phone unit from "falling into foreign hands" in the event of a sale. "Now that Prime Minister Romano Prodi has expressed 'surprise' at Telecom Italia's decision to spin off its mobile unit and probably sell it...the government must take the step of using its golden share to protect national interests, just like the French do," Adusbef Chairman Elio Lannutti said in a statement. Telecom Italia said Monday it is spinning off Telecom Italia Mobile, or TIM, into a separate unit as part of a strategic move, and would examine offers for the unit should interested buyers step forward. A so-called "golden share" gives a government veto powers over corporate decisions at the former monopoly. The E.U. said Wednesday golden shares have no place in the internal market, adding it will watch closely for violations. Prime Minister Romano Prodi said Tuesday he was "surprised" and "worried" about Telecom Italia's spin-off, and that he would review the proposal as soon as details were available. He stopped short of saying he would use the golden share, though he is under pressure from left-wing members of his government to do so. Lannutti said the problem isn't foreign ownership per se but rather that recent foreign takeovers in Italy have failed to produce benefits for consumers. He pointed to local acquisitions by Dutch bank ABN Amro Holding and French firm BNP Paribas. Italy has among the highest costs in Europe for banking charges, as well as for road tolls and electricity. Adusbef, along with other consumer groups, has had some success in obtaining concessions on banking costs from the Italian Banking Association. Instead of lowering prices for consumers, Italy's privatizations in the 1990s "created wealth for private investors...without improving the quality of services," the consumer group said. In order to qualify for euro-zone membership in the mid-1990s, Italy's center-left government, lead by current Prime Minister Romano Prodi, sold off state assets including Autostrade, Enel, Eni, Telecom Italia, and all of Italy's state-held banks. Yet electricity costs and banking charges haven't fallen. Prices have dropped for telecommunications services but the 1997 privatization under Prodi was badly handled and has hobbled the company ever since, critics have said. Adusbef called on the Italian government to approve a law allowing for class action suits from consumers. Adusbef said it believed class action suits, which are barred by Italian law, would be an effective tool for consumer groups. -By Jennifer Clark, Dow Jones Newswires; 39 02 58 21 9904; [email protected] (END) Dow Jones Newswires

15/09/2006

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