Telecom Italia, in which Spain's Telefonica owns a stake, said Monday it was not planning to sell its Brazilian unit, TIM Participaçoes.

The Italian telecommunications company released a statement in response to a request from Consob, the agency that regulates Italy's securities markets, amid rumors that the process of selling the Brazilian business was underway.

The "majority stake in TIM Participações is a strategic asset" and no "contacts have been established with possible buyers" nor have "acquisition offers" been received, Telecom Italia said.

"Telecom Italia wants to make it clear that the rumors about supposed plans for the disposal or total or partial valuation of the assets in Brazil that reporters, experts and analysts are talking about are totally unfounded," the company told securities regulators.

Reports began to circulate about a possible sale of the Brazilian unit after Spain's Telefonica agreed in September to gradually increase its stake in holding company Telco, which owns 22.4 percent of Telecom Italia.

Brazil's anti-trust agency will decide whether to allow Telefonica to keep control of its Vivo unit and, indirectly, of Telecom Italia's TIM unit, Brazilian Communications Minister Paulo Bernardo Silva said on Sept. 30.

Telecom Italia owns a nearly 67 percent stake in TIM Participaçoes via TIM Brasil Servisos e Participações SA.

Telefonica controls Vivo, which is the leading provider of wireless service in Brazil with a 28.7 percent market share. EFE