MILAN, Italy (AP) — Telecom Italia will cut 5,000 jobs by 2010, mostly through the combination of its fixed and mobile units, chief executive Franco Bernabe said in an interview published yesterday.

The cuts at Europe's fifth-largest telecommunications company are part of a three-year plan to reduce costs by 300 million euros ($464 million) a year and increase efficiency at Italy's dominant telecoms operator.

Bernabe, who took over Telecom Italia in December, said the cuts are needed to continue investments in new technologies at a time when the price of services keeps going down.