Telecom Italia is to invest EUR3 billion (US$4.2 billion) in its Brazilian unit over the next three years to expand much of its mobile broadband network in the country, the firm’s chairman told a local newspaper yesterday. According to a Reuters report, Telecom Italia’s Gabriele Galateri told the Folha de S. Paulo newspaper that Brazil offers “great potential” for the Italian telecoms giant. Telecom Italia has invested EUR10 billion in its Brazilian untit – TIM Participacoes – over the last decade. Regarding future investment, Galateri noted that mobile broadband represented a better business opportunity for the operator due to weaknesses in the country’s fixed-network infrastructure, the newspaper reported.

TIM Participacoes (TIM Brasil) is Brazil’s third-largest mobile operator and had 36 million mobile connections by 1Q09 according to Wireless Intelligence data. Although parent company Telecom Italia is struggling with debt it has consistently pledged its support for its fast-growing Brazilian unit. However, Galateri hinted at a possible sale of its neighbouring Argentinean mobile business, telling Folha de S. Paulo that a decision to exit Argentina will be made based upon “how much value” the unit creates. He also addressed long-standing rumours of a possible merger between Telecom Italia and Spain’s Telefonica, claiming the speculation was generated by “people and companies whose real interest is to destabilise Telecom Italia.”