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UPDATE 2-Telecom Italia sells ETECSA stake for $706 million

Published 01/31/2011, 03:19 PM
Updated 01/31/2011, 03:24 PM

* Has received $500 million cash

* Balance due over 36 months (Adds background on Rafin)

ROME, Jan 31 (Reuters) -Telecom Italia has sold its 27 percent stake in state-run Cuban group ETECSA for $706 million, Chief Executive Franco Bernabe said on Monday.

Bernabe said $500 million had already been paid by Rafin SA, the Cuban company that purchased the stake, with the balance due to be paid in 36 monthly installments.

An ETECSA spokesman in Havana said he could give no further details about the operation. Rafin is a Cuban financial services company widely believed to be controlled by the armed forces of the communist-ruled island.

The deal had been widely expected following reports at the end of last year. According to media reports, Telecom Italia had been seeking to shed some operations to reduce debt.

ETECSA holds the monopoly for fixed and mobile phones in Cuba, as well as for access to the Internet and for data transmission.

Telecom Italia figures show ETECSA mobile phone users in Cuba grew by 87 percent in 2009 to 621,100 clients, most of them with prepaid contracts.

Nevertheless, the ratio of mobile phones per person in Cuba and Internet penetration on the island is among the lowest in the Western Hemisphere. Access to the Internet is controlled by the authorities. (Additional reporting by Esteban Israel in Havana) (Reporting by Alberto Sisto; Editing by Dan Lalor)

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