Telecom Italia may revive Metroweb talks after Vodafone move-sources

MILAN (Reuters) - Telecom Italia (TLIT.MI) may revive talks to take over fixed-line broadband provider Metroweb this week after rival Vodafone (VOD.L) made a fresh attempt to buy a stake in the group, two sources close to the matter said.

Metroweb is a small firm which rents out fibre optic cables but Prime Minister Matteo Renzi considers the partly state-owned company as a building block for a 12 billion euro (8.73 billion pounds) plan to roll out high-speed networks in Italy.

Buying a stake in Metroweb, which owns the biggest fibre-optic network in Italy's business capital Milan, could ultimately determine who calls the shots in the multi-billion-euro plan.

Telecom Italia board directors will meet on Thursday in Venice to review the situation after talks to buy a stake in Metroweb collapsed earlier this year due to disagreements over the ownership structure of the deal.

"There could be an opportunity (to resume talks)," one of the sources said, asking not to me named because no formal decision had yet been taken.

The battle for Metroweb comes as the Italian government pushes to modernise its increasingly decrepit broadband system and speed up the roll-out of ultrafast networks to help its ailing economy.

Both Telecom Italia and Vodafone, which competes with the former phone monopoly for the top rank in the mobile market, have set their sights on Metroweb as they seek to meet growing consumer demand for bandwidth-consuming services.

Telecom Italia is interested in securing a 51 percent stake but Chairman Giuseppe Recchi said in February the board had concluded conditions were not yet right for an agreement.

Vodafone last week signed a non-disclosure agreement over Metroweb, formally opening negotiations to buy a stake and putting pressure on Telecom Italia to reconsider its stance.

Telecom Italia declined to comment.

The British company previously said there could be risks to competition if other operators are not allowed to take a stake in Metroweb and have a say over its strategic decisions.

(Reporting by Danilo Masoni and Stefano Rebaudo; Editing by David Holmes)