Telecom Italia chief rules out merger with Telefonica

Telecom Italia head Franco Bernabe dismissed on Tuesday rumours of an impending merger with the group's primary shareholder Telefonica of Spain.
"We are happy as we are," Bernabe said when asked about the rumours at a news conference called to discuss the group's 2009 results and strategy going forward.
"We have very good personal relations with Telefonica, very good business relations," he said, before adding: "Of course not in South America where we are competitors."
A merger between the two groups has been mooted since the Spanish group became the leading stakeholder in Telco, Telecom Italia's holding company, in 2007.
In late February a financial source told AFP that shareholders were considering the feasibility of a tie-up.
Earlier that month the Italian government denied reports that it was about to give the go-ahead for a merger.