Telecom Italia is looking at a spin-off for its mobile unit, as well as doing the same for its fixed network according to Reuters, although the story was subsequently denied by the company.

Such a move would give Telecom Italia the chance to reduce debt and staff costs while attracting potential new investors, said one of a number of sources quoted.

The company described the story as “groundless”.

Spinning off the company’s mobile unit is a new idea. Previously, the most likely option seemed a combination with the local unit of Hutchison Whampoa.

However, a panel of Telecom Italia’s directors were unable to reach a common decision on whether to join forces with Hutchison. Hence they were unable to present a firm proposal to its board at its recent meeting on 8 May.

The company has also been considering a spin off for its fixed network, a move that potentially would speed up regulatory approval for any Hutchison deal since it would reduce political tension around a national asset, such as telecoms infrastructure, being controlled by a foreign entity.

Telecom Italia’s mobile unit has 32 million subscribers (Q1, 2013 figures) according to Wireless Intelligence, making it the country’s market leader. Hutchison’s local unit has 9.6 million subscribers.