Vodafone sues Telecom Italia for €1-bn damages

Vodafone Group Plc (Vodafone) is seeking more than €1 billion ($1.33 billion) in damages from Telecom Italia SpA (Telecom Italia) for a series of abuses, saying the Italian major has tried to impede its growth in the Italian fixed-line market during 2008-13.

Vodafone and Telecom Italia are the two biggest wireless companies in Italy, together controlling about two thirds of the home market.

Rejecting the claim, Telecom Italia said that it was confident it would demonstrate the ''total correctness'' of its behaviour.

In May, Italy's competition authority had fined Telecom Italia €104 million for abusing its dominant market position as owner and manager of the country's largest fixed-line telephone network.

Vodafone said in a statement Telecom Italia had impaired its ability to compete in the Italian market causing it the loss of customers, forced it to pay artificially high costs to compete in the market and also restricted Vodafone Italy's ability to grow its fixed-line business.

Last month, Vodafone posted a 3.5 per cent drop in organic service revenue with Italy, once one of its growth markets. It is planning to acquire Fastweb SpA, a unit of SwissComm, to expand its fixed-line and Internet assets.

After failing to sell a stake to Hutchinson Whampoa Ltd, Telecom Italia is working on spinning off its fixed-line assets.

British Vodafone Group owns 77-per cent Vodafone Italy and the group's US partner, Verizon owning the rest.

Telecom Italia last week reported a first-half net loss of €1.41 billion after taking goodwill writedowns of €2.2 billion euros.