British telecoms provider Vodafone Group is suing Telecom Italia for abusing its dominant position in Italy, seeking damages of more than 1 billion euros ($1.3 billion).

A Vodafone spokeswoman said in an email on Sunday the civil action in Milan stated that Telecom Italia committed a series of abuses from 2008 to 2013 "with the intention and effect of impeding growth in competition in the Italian fixed-line market".

Telecom Italia rejected the claim saying it was confident it would demonstrate the "total correctness" of its behaviour.

In May, Italy's competition authority fined Telecom Italia about 104 million euros for abusing its dominant market position as owner and manager of the country's largest fixed-line telephone network.

Telecom Italia has said it would appeal against the antitrust fine, which was decided after a three-year investigation prompted by rivals Wind, Italy's third-largest mobile operator, and broadband company Fastweb, a unit of Swisscom.

Vodafone said Telecom Italia had caused a loss of customers, restricted Vodafone Italy's ability to grow its fixed-line business, and forced it to pay artificially high costs to compete in the market.

Vodafone Italy, which filed the lawsuit, is 77 per cent owned by Vodafone, with the rest held by the British firm's US partner Verizon Communications.

The lawsuit comes as Telecom Italia is moving ahead with a plan to spin off its fixed-line copper network, which rivals say gives it a competitive edge.

Last month, Vodafone posted a 3.5 per cent drop in organic service revenue with Italy and Spain posting double-digit falls and competition increasing in its once-reliable markets of Germany and Britain. - Reuters