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Telecom Italia urges probe into Mediaset-Sky deal

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Milan (AFP)

Telecom Italia (TIM) called Wednesday for regulators to look into a tie-up between Silvio Berlusconi's Mediaset TV group and Rupert Murdoch's Sky Italia in order to prevent further concentration in the Italian media.

The deal could complicate efforts for Telecom Italia's main shareholder, Vivendi, to revive the fortunes of the Italy's former monopoly telecoms provider as broadcasters scramble to acquire content to keep subscribers from defecting to services such as Netflix.

Under the deal announced over the holiday weekend by the Italian TV heavyweights nine of Mediaset's Premium pay-TV channels will be made available to Sky Italia subscribers.

"I believe that the authorities will have to examine the alliance carefully so that it does not give rise to a (media) concentration even greater than that existing today," Telecom Italia's chief executive Amos Genish said in the interview with Italian daily La Stampa.

The surprise deal with Sky Italia has given a boost to Mediaset's shares, which have risen by over six percent since the announcement.

For the Berlusconi family group, the accord is a lifeline that should help the struggling Premium unit increase its audience and advertising revenues, after a series of setbacks for the platform.

One of those setbacks was Vivendi pulling out of a deal to buy the service in 2016. It suffered further hardships after its sizeable investment for exclusive rights to the 2015-18 Champions League seasons in Italy failed to pay off.

The new deal also leaves the door open for Sky to acquire a newly-founded company which will hold Premium's assets in the future.

While Telecom Italia has exclusive content from Vivendi's Cananl+, the deal thwarts the effort by Vivendi's owner, French billionaire Vincent Bollore, to create a preeminent provider of content that capable of keeping at bay Netflix and other streaming services.

Vivendi is also fighting off an activist investor who has challenged its management strategy for Telecom Italia.

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