Telecom Italia denied on Thursday a newspaper report from India that it was close to a deal to invest $2 billion for a 49 percent holding in a telecommunications venture of Indian realty Unitech .

"The story is baseless," a Telecom Italia spokesman said.

India's Economic Times newspaper said Telecom Italia was close to reaching a deal on the investment.

Citing an unidentified executive of the Indian company, the newspaper said Unitech would transfer its telecommunications business to a new company, in which it will hold the remaining 51 percent.

Unitech has licences to provide telecoms services in all of India's 22 service areas, but is yet to start operations. In July, Managing Director Sanjay Chandra said the firm wanted to finalise a foreign partner in two months.

A spokesman for Unitech declined comment on the newspaper report.

India permits foreign firms to own a maximum of 74 percent in a telecoms firm. (Reporting by Stefano Rebaudo in Milan and Devidutta Tripathy in New Delhi; Editing by Ranjit Gangadharan and Quentin Bryar)

Source:Reuters