Italy is reviewing options for gaining control of a key Telecom Italia unit which manages subsea cables between Italy, the US and Israel, people familiar with the matter said. It is understood Prime Minister Giorgia Meloni's government is looking at how it could take control of the Telecom Italia Sparkle S.p.A. business as part of a bigger deal that would see the ex-monopolist sell its network business to KKR & Co. Inc. (NYSE:KKR).

One option under consideration could be acquiring a controlling stake in the unit, which Ms Meloni sees as strategic for the country. Planning for that option is still in the preliminary stages and a final decision has not been taken, sources said. The unit is valued at around ?700 million, they said.

A spokesperson for Ms Meloni's office declined to comment. Italy's Finance Ministry said a decision on the matter has not been made. Representatives for Telecom Italia and KKR declined to comment.