Telecom Italia (TI) is reportedly not ready to enter talks with Telefonica SA before the Italian player has presented its long-awaited three year business plan on March 8. According to the Italian daily, La Repubblica, the two have talked about the Spanish firm buying a significant stake in the Italian incumbent.

Citing unnamed board members, La Repubblica said TI would first have to sign a memorandum of understanding, preventing it from speaking with other telecoms firms before Telefonica could proceed.

Pirelli, which controls TI through holding company, Olimpia, is believed to favour a deal between the two which could generate much needed cash. Pirelli has confirmed publicly that it is in talks with Telefonica and other parties to sell a minority stake in Olimpia.

On Monday, prospects of a successful deal were given a boost when Italian infrastructure minister, Antonio Di Pietro indicated that he would allow Telefonica to buy a stake in Telecom Italia.

In a report by the International Herald Tribune, Di Pietro said: “We are European and as such we don’t impose any limits on the ownership of the telephone company by Italians or foreigners… the issue is that a foreigner can’t just come to Italy and start buying up companies. One must consider industrial plans, proposed investments and the trustworthiness of the investors.”

Last year TI announced a reorganisation of the company to sharpen its focus on internet services.