* CEO Patuano says TIM Brasil core asset but sale option open
* Chairman Recchi says no contact with Mediaset (Adds detail on network spinoff)
By Stefano Rebaudo
CERNOBBIO, Italy, Sept 6 (Reuters) - Telecom Italia may reconsider the planned sale of its stake in Telecom Argentina to investment fund Fintech if the government in Buenos Aires takes too long to approve the deal, the Italian group's chief executive said on Saturday.
Telecom Italia, which agreed to sell its stake in Telecom Argentina to Fintech last year for $960 million, has already pushed back completion of the sale twice while awaiting regulatory approval. The deadline, originally set for early August, has now been delayed to Sept. 25.
Speaking to reporters at the margins of the Ambrosetti forum meeting in Cernobbio near Milan, Telecom Italia Chief Executive Marco Patuano said the financial crisis in Argentina had inevitably held up approval but that the deal could collapse if the government took too long to clear the sale.
"The sale was supposed to be completed in the summer when the country went through a major crisis and it's normal that it wasn't the main focus of attention for the authorities," he said. "But we can't put it off indefinitely and in that case would reconsider," he said, without giving details.
The comment reflected the pressure on Telecom Italia, which has debts of around 32 billion euros and which lost its investment-grade credit rating last year.
The sale of the Telecom Argentina stake is part of a broader 4 billion euro ($5.2 billion) plan designed by Patuano to help cut debt and fund investments needed to upgrade Telecom Italia's domestic assets and head off competitors.
"Our strategy is one of organic growth and we will return to organic growth, we will return to investment," he said.
Patuano repeated that a sale of Telecom Italia's stake in Brazilian mobile operator TIM Brasil was an option, although for the moment it remained a core asset.
The future of the stake has been in doubt following the Rome-based group's failure to acquire Brazilian broadband business GVT from France's Vivendi after a bidding war with Spain's Telefonica.
That failure left Telecom Italia badly exposed in Brazil, where its mobile business lacks the kind of broadband networks controlled by rival operators and opened up the prospect of a wider shake-up in the Brazilian mobile sector.
"My answer hasn't changed," Patuano told reporters when asked about the possibility of selling the TIM Brasil stake. "TIM Brasil is a core asset but we are open to all options."
Patuano also rejected speculation that it could revive plans to spin off its domestic fixed-line network.
"The strategy isn't changing, we do not intend to separate the network," he said.
Separately, Telecom Italia Chairman Giuseppe Recchi said the group, which has a commercial alliance with pay-TV group Sky, was looking at possible agreements with distributors and content providers in the media sector as it considered its broader strategic options.
But he denied there had been any contact with Mediaset following reports the company was looking at a commercial tie-up with the broadcaster, controlled by former Italian prime minister Silvio Berlusconi.
1 US dollar = 0.7722 euro Writing by James Mackenzie, editing by David Evans