France Telecom has pulled out of the running for a stake in Italian carrier Telecom Italia after recording better than expected revenues for the first quarter of the year.

The French telco had initially contacted Italian banks and insurers in an attempt to create a consortium that is acceptable to the Italian government, as ministers made it clear that foreign investors would be challenged in order to keep TI in Italian ownership.

However, it has been reported that an industrial partnership, such as a network sharing deal, could be of interest.