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The Italian telecom firm would reduce the domestic employee numbers by 4,000 in addition to the earlier planned 5,000 job cuts by 2010, it said.
Telecom Italia is targeting to reduce the debt significantly over the period 2009-2011.
It plans to reduce net debt to earnings before by interest, tax and depreciation and amortisation ratio to 2.3 at the end of 2011 from over 3 at present.
At the end of 2009, the net debt/EBITDA ratio is expected to be about 2.9 by year-end 2009.
"The conditions that have since emerged on the market and in the real economy mean that it is necessary to be even more incisive in our priority of debt reduction," Telecom Italia CEO Franco Bernab said.
Further, the company plans to consolidate its equity stake in Telecom Argentina with the support of local partner, and no financial outlay would be from Telecom Italia.
Telecom Italia would also sell of its non-core assets for up to $3 billion, while it will strengthen its position in emerging market of Brazil.
The restructuring plan entails reduction of costs and investments by some 2 billion euro in 2011, the statement added.
Primary objective of the 2009-2011 plan of the company is to invert the revenues trend in 2010 through growth in revenues from innovative services (broadband and adjacent businesses).
And by 2011, these revenues will account for around 28 per cent of overall domestic revenues, it added.
"The objective of this plan is to continue the trend of improving revenue dynamics and margins which began in 2008 and restore the Telecom Italia Group's selective path to growth, characterised by strict financial discipline," Bernab said.
Besides, the earnings targets of Telecom Italia for 2008 and 2011 include average yearly revenue growth in excess of two per cent, while the capital expenditure would correspond to about 13-13.5 per cent of revenues.