CARLYLE and Apax Partners, the private equity firms, are circling TIM, the €35 billion (£24 billion) mobile arm of Telecom Italia, which will be put up for sale today in a surprise move by the Italian communications giant.

Telecom Italia will announce at a special board meeting today that it is to overhaul the entire group, splitting its mobile, fixed-line and infrastructure businesses into three separate businesses.

The move, which is aimed at transforming the struggling group from a traditional telecoms player into a media company that distributes music, films and television over its broadband internet service, will kick off a sale of the mobile arm, TIM.

A potential sale of the retail services arm of the fixed-line business could follow at a later stage. However, Telecom Italia is likely to hold on to its fixed-line infrastructure business.

The overhaul follows the recent failure of Pirelli, which controls Telecom Italia, to float the Pirelli tyre business. Sources said that the failure had forced the group to attempt to find funds through other means.

The sell-off of TIM will mark an embarrassing strategic U-turn for Telcom Italia.

In 2005 Marco Tronchetti Provera, chairman of Telecom Italia and one of Italy’s best- known entrepreneurs, bet the future of the group on providing converged services, acquiring the 44 per cent of TIM that Telecom Italia did not already own to enable it to give the triple offering of mobile, fixed line and broadband services.

However, last week Signor Tronchetti Provera, who is determined to keep abreast of the dramatic changes under way in the telecoms sector, where media and telecoms are merging into one, held a meeting with Rupert Murdoch, the chairman and chief executive of News Corporation, parent company of The Times.

The two men are understood to have discussed a potential content deal between the two companies — signalling the start of a new strategy for Telecom Italia.

Although the sale of TIM, Italy’s biggest mobile company, will only be officially announced today, it is understood that early-stage talks about a sale are under way with private equity groups. Carlyle, Apax Partners and Permira were named as potential buyers by sources last night.

Marco De Benedetti, the former chief executive of TIM, joined Carlyle as managing partner for Italy last year. Potential trade buyers are likely to include Deutsche Telekom and France Télécom.

In a statement last night, Telecom Italia announced that its chairman, Signor Tronchetti Provera, had met Lamberto Cardia, chairman of the Italian market regulator, Commissione Nazionale per le Societa e la Borsa, “to discuss the strategic plans of the company and the group”.

It said that a board meeting today would address a “reorganisation of the group’s fixed and mobile assets” as well as its six-month results. The company’s shares will be suspended today ahead of the meeting.

Italy is one of the world’s most fiercely competitve mobile markets, with players including Vodafone, Wind and 3 battling it out for customers. The failure of 3 to float its Italian mobile arm provided further evidence of the tough conditions in the market.

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