Orange potentially interested in deal with Telecom Italia, CEO tells paper

PARIS, March 1 (Reuters) - France's Orange (LSE: 0OQV.L - news) and Italy's telecom operator Telecom Italia have been discussing a possible alliance between the former monopolies, Orange's chief executive told the Journal de Dimanche.

"There are no negotiations ongoing just exchanges of points of view between the two management teams," said Orange's CEO Stephane Richard.

"It would be an attractive European consolidation opportunity."

A spokesman for the heavily indebted Telecom Italia said there had been no talks over a possible tie-up with Orange.

A period of consolidation has been underway in the European telecoms sector for the past two years as companies from Vodafone to Hutchison (HKSE: 0013-OL.HK - news) seek to bulk up to compete and serve smartphone-toting customers with ever-faster broadband speeds.

The spate of deals so far have taken place within national markets and not across borders because the former create rapid and large cost savings. But European policy makers hope that eventually the emergence of regional champions will occur via cross-border consolidation.

Richard seemed confident Orange would be able to convince the French government, which has a 25 percent stake in the operator, of the value of a cross-border deal.

"The state will agree to slightly loosen its grip for Orange to do a major transaction," he told the weekly newspaper.

A spokesman for Orange did not immediately return a request for comment. (Reporting by Sybille de La Hamaide and Gwenaelle Barzic in Paris, and Danilo Masoni in Milan; Editing by Leila Abboud and Elaine Hardcastle)