Telecom Italia's chairman confident of sweeter relationship with Rome

By Agnieszka Flak

MILAN (Reuters) - Telecom Italia's (TIM) (TLIT.MI) executive chairman Arnaud de Puyfontaine was confident on Wednesday of resolving outstanding issues between the former state phone monopoly and the Italian government to enable a new era of improved relations.

The tensions between TIM and the Rome government have been growing in recent years, especially since French media group Vivendi (VIV.PA) became its top investor and started calling the shots at Italy's biggest phone group.

Italy said last year it wanted a say in TIM's strategic decisions such as mergers or selling assets it deemed to be of strategic importance, under a so-called "golden power" decree, seen as a move to rein in Vivendi's influence.

Speaking on the sidelines of a Reuters Breakingviews event in Milan on Wednesday, de Puyfontaine, who also serves as Vivendi's chief executive, said discussions with Rome on the implementation of the golden power decree and other matters were progressing well.

"Things are fine and I'm very keen to close all the pending subjects and to open a new era in the relationship," de Puyfontaine said. "I'm pretty confident."

Earlier this week TIM presented a proposal to communications regulator AGCOM to put its network into a separate company fully owned by the group, widely seen as a bid to address calls for it to loosen its grip over a key industry asset.

TIM has come under pressure from Italian politicians, regulators and rivals to separate and upgrade its network, its most prized asset which analysts have valued at up to 15 billion euros ($18.6 billion).

The pressure has intensified since Vivendi, which owns 24 percent of TIM, began to exert greater influence, raising concerns among politicians in Rome.

De Puyfontaine said he fully backed CEO Amos Genish in the open discussions regarding the network he kicked off with the regulator and Rome.

"I'm happy about the progress that has been made," he said, adding the matter was still subject to many details that have to be discussed and decided.

Several sources had said last week there were tensions between Vivendi and TIM's latest CEO, especially after Genish's two predecessors left over disagreements with the top investor.

However, de Puyfontaine sought to quash any such suggestion.

"TIM under the leadership of Amos Genish has done exactly the right job," he said.

(Additional reporting by Stephen Jewkes; Editing by Elaine Hardcastle)