"Realistically, it is probable that the auction for the fourth licence will happen before the completion of the privatisation of Autostrade," Claudio De Vincenti told Reuters Television Italia.

IRI chairman Gian Maria Gros-Pietro told reporters earlier this week the sale of Autostrade could start before the summer. Autostrade has expressed interest in taking part in the fourth cellphone licence auction, due before the end of May.

De Vincenti noted that Autostrade had already set up a separate company for telecommunications, something he said was essential to guarantee transparency if it were to bid.

"I believe that if there is a separation of interests, there is no problem from that point of view. It is not important whether the privatisation or participation in the auction comesfirst," he said.

Commenting on the possibility that the government could offer two mobile telephone licences at the auction, De Vincenti said the government's aim was to develop competition to the full. "The more licences we manage to award, the better it is."

Italy already has three mobile phone operators -- TelecomItalia Mobile, Omnitel, which is controlled by Olivetti and Germany's Mannesmann and the winner of last year's auction for the third licence, Wind.

Wind is a joint-venture between Italian electricity utility ENEL, France Telecom and Deutsche Telekom due to start service soon.

De Vincenti said the telecoms regulator was looking into whether there was sufficient band width to allow a fifth licence. "But if the technical conditions are there, we'll do it," he said.