MILAN, Feb 18 (Reuters) - State-backed Poste Italiane

is ready to increase its recently acquired stake in

Telecom Italia (TIM), three sources said, in a move

that would strengthen its position in any potential M&A deal

involving the phone group.

Poste declined to comment.

The financial conglomerate led by former JPMorgan banker

Matteo Del Fante said on Saturday it was replacing state lender

CDP as a leading TIM shareholder by taking CDP's 9.8% stake.

After moving swiftly to secure the stake, Poste is assessing

all potential options and has not yet taken any decision on

future moves, the sources said.

Poste, whose services span from energy to insurance,

will present a strategy update on Friday.

The stake purchase comes ahead of expected consolidation in

Italy's telecoms sector, where price competition has been

eroding profit margins for years, making it hard for firms to

sustain the necessary investments.

Any deal involving TIM would concern the entire company

because the government opposes separating its consumer and

corporate businesses, one of the first three sources, and a

fourth person, said.

Poste's investment comes after TIM last year stabilized

its finances by cutting debt through the sale of its prized

landline grid to a consortium led by U.S. fund KKR,

under a government-backed plan.

The slimmed-down TIM has drawn M&A interest.

Representatives of rival

Iliad and private equity firm CVC

approached Italian government officials about their

respective plans for TIM not long before Poste's decision to

step in, sources have previously said.

Poste is ready to open discussions with all relevant

stakeholders, one of the sources said.

TIM's main investor, French media group Vivendi

, is open to selling its 24% stake after failing to halt

TIM's landline grid sale. It is refusing to engage with TIM CEO

Pietro Labriola.

By upping its holding Poste would be able to ensure a

significant state-sector presence in TIM's capital even after

any tie-ups.

In announcing its investment in TIM on Saturday, Poste

said the operation was aimed at "creating synergies between the

companies and favouring, with all the players involved, the

consolidation of the telecommunications market in Italy".

Poste offers mobile phone services through its Poste

Mobile unit but it doesn't own its own network.