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UPDATE 2-Open Fiber head says well-placed to buy Telecom Italia's network

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MILAN, Aug 7 (Reuters) - Italy's new telecoms network company Open Fiber would be in a good position to buy Telecom Italia's (TIM) network, it said on Monday, adding to a growing debate on whether the former phone monopoly should sell its most prized asset.

Italian politicians have been calling on and off since 2006 for the network to be transferred to a state-controlled entity as Rome considers it a strategic asset that should be a neutral platform open to all phone companies.

Telecom Italia has also been criticised for putting off costly upgrades to its ageing copper network to provide faster internet connections and is now facing competition from Open Fiber, which is owned by state-controlled utility Enel and state-owned lender Cassa Depositi e Prestiti (CDP).

Telecom Italia and Open Fiber, which was founded at the end of 2015, are building competing fast internet networks across Italy, though many industry experts say such costly duplication makes little economic sense.

"Open Fiber, or its shareholders, would be well placed to buy Telecom's network, as it could make the most of the synergies between the two networks and speed up a migration from copper to fibre," Open Fiber Chairman Franco Bassanini told La Stampa daily in an interview.

The plan to transfer Telecom Italia's network, which according to some estimates could be worth up to 15 billion euros ($17.7 billion), has foundered in the past over its valuation and because TIM insisted on hanging onto the business.

However, the idea is gaining traction once again with a view to fostering cooperation to allow a speedy roll-out of an ultra-fast broadband network across Italy.

NETWORK FRICTION

The future of the network could also become a bargaining chip to soothe relations between the government and France's Vivendi, which is TIM's top shareholder and is under scrutiny for its growing influence over Italian business.

"A spin-off ... would make it easier to reach some sort of agreement or tie-up that avoids a duplication of infrastructure and speeds up the roll-out of the next generation's network," Bassanini said.

Speculation about a possible spin-off has also been rekindled by Telecom Italia Chairman and Vivendi CEO Arnaud de Puyfontaine, who said on July 28 it was an "interesting" option and "something that will be discussed in the future".

A sale of the network could help Vivendi mend its fraught relations with Italian regulators.

Italy's communications regulator has told the French media company to cut its stake in either TIM or broadcaster Mediaset , arguing it was in breach of rules aimed at avoiding a concentration of power in the telecoms and media sectors.

The government is also looking at whether Vivendi duly informed it that it exercised de facto control over TIM. Vivendi appointed two-thirds of the phone company's board and recently played a key role in the departure of CEO Flavio Cattaneo.

According to Italian newspaper Il Sole 24 Ore, Vivendi will have to declare whether it controls Telecom Italia on Monday following a request from Italy's market watchdog Consob.

Telecom Italia could spin off its fixed-line network and list it on the stock market, allowing the company to extract more value from the asset and offload some of its debt, according to Italian media reports.

Britain's BT has faced similar criticism from rivals who say it has not invested enough in upgrading its own copper network to speed up internet connections around the country.

After months of negotiations, the British regulator in March allowed BT to keep the network, but said it must be legally separated, with an independent board responsible for setting its strategy and operations.

The Czech Republic is one of the few in Europe to separate its network infrastructure from consumer telecoms businesses to allow each to focus on its specialisation and unlock value.

In 2015, O2 Czech Republic, which included former fixed-line monopoly Czech Telecom and mobile operator Eurotel, was split.

The fixed-line networks business was spun off to become part of the PFF private equity group controlled by the Czech republic's wealthiest man, billionaire Petr Kellner, leaving the phone operations with O2 Czech Republic. ($1 = 0.8473 euros) (Reporting by Valentina Za and Stefano Rebaudo; additional reporting by Paul Sandle in London and Eric Auchard in Frankfurt; writing by Silvia Aloisi; editing by David Clarke)