By Matthew Cowley

SAO PAULO--The top executive at Telecom Italia on Tuesday denied there are any discussions over selling the firm's Brazilian unit and reiterated his commitment to investing more in Latin America's largest economy.

There has been intense scrutiny of Telecom Italia's activities in Brazil since Spain's Telefonica SA opted to increase its stake in Telco, a holding company that owns 22.4% of Telecom Italia.

That means Telefonica is soon expected to become a dominant shareholder in Telecom Italia, and Brazil's antitrust authority has said that creates a conflict of interest between the two firms' local operators, Telefonica Brasil SA and TIM Participacoes SA. Cade, as the antitrust body is known, has given Telefonica a confidential deadline by which it must either dispose of TIM or seek a new partner for its own Brazilian unit, which operates under the Vivo brand.

"There has been no offer or even discussion about the sale of TIM Brasil," Telecom Italia's chief executive, Marco Patuano, told reporters after meeting with Communications Minister Paulo Bernardo in the capital, Brasilia.

He directed queries about the antitrust decision to the Spanish company.

"You have to ask Telefonica. It's not a problem of Telecom Italia," Mr. Patuano said.

Mr. Patuano also said there are no discussions under way about a possible merger with fixed-line phone company GVT, a unit of France's Vivendi SA. Yet the executive did acknowledge that, because TIM specializes in mobile telephony and GVT concentrates on fixed-line business, they might be a good match-up. There has been speculation in recent weeks that the two might have been discussing joining forces.

"They are two companies that clearly have complementary positions," Mr. Patuano said.

The Italian executive said his focus is to increase investments in the Brazilian unit, which is an essential part of Telecom Italia's future plans. TIM will invest 4 billion Brazilian reais ($1.7 billion) this year and 11 billion reais over the next three years, he said.

"Brazil is core market. I don't know how else to say it. That is the position of Telecom Italia," said Mr. Patuano. "Brazil has a lot of young people, there is lots of demand for mobile broadband."

-Bruno Lourenco in Brasilia contributed to this article.

Write to Matthew Cowley at matthew.cowley@wsj.com

 -0- 
 
Telefonica Brasil (NYSE:VIV)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Telefonica Brasil Charts.
Telefonica Brasil (NYSE:VIV)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Telefonica Brasil Charts.