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Telecom Italia on Friday formally scrapped the sale of its mobile operations in Brazil, the last remaining part of a defunct restructuring plan that plunged the company into turmoil late last year.

TI, Italy’s dominant telecommunications operator, said its board of directors had confirmed the “strategic nature” of the subsidiary in Brazil and “decided not to accept the offers for its acquisition which were received”.

The possible sale of the mobile unit was part of a plan announced in September by Marco Tronchetti Provera, then TI chairman. TI said it would separate into three units in an apparent reversal of its previous strategy to integrate its fixed-line and mobile businesses. Asset sales were flagged to help boost investment as it sought to focus on broadband.

However, Mr Tronchetti soon resigned as a dispute with the government deepened over asset sales. Guido Rossi, the new chairman, reined in the plans to split.

The company confirmed Friday it had abandoned the final part of Mr Tronchetti’s restructuring plan and would remain united. It said the board had approved an organisational structure based around its four Italian businesses of domestic fixed services, domestic mobile, large clients and technology. The company is still in negotiations with regulators about separation of its local infrastructure activities.

The company said it acknowledged the success of its Brazilian unit in a competitive market. TI’s mobile arm in the country is expected soon to say it achieved market-leading revenues from its services in the fourth quarter last year.

There is still uncertainty about TI. The company is due in March to announce its business plan for the next few years. In April the whole board is up for renewal at a shareholders’ meeting at a time when there is change in the air around the company’s ownership structure.

Mr Tronchetti is still chairman of Pirelli, the tyres and real estate group which is TI’s biggest shareholder. Pirelli is negotiating with a number of groups about selling some of its stake – the latest has been Telefónica. However, Pirelli has the TI shares on its books at 25 per cent more than their market price.

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