In a document outlining its vision for TIM, Merlyn - which holds 0.5% of the group - drew up six scenarios ahead of an April 23 shareholder vote to name new top executives at TIM.

Four of the six scenarios are built around the proposed sale of TIM's domestic access network to KKR, an up to 22 billion euro deal promoted by TIM CEO Pietro Labriola, who is seeking reappointment this month.

Merlyn also studied the possibility of retaining the fixed line network while selling the domestic consumer business and Brazilian phone carrier TIM SA.

The plan "offers an alternative path for TIM. It addresses any contingent scenario to make sure that the much needed deleveraging of TIM happens as soon as possible," it said.

Merlyn is challenging the reappointment of Labriola, who has come under pressure following a record stock plunge last month after TIM disclosed the financial outlook for the business emerging from the network sale.

Merlyn said TIM should focus on providing high value connectivity and digital services to big corporate clients and public administration customers.

"This transformation will be executed by immediately divesting from non-core operations such as TIM Brasil already in 2024 and businesses lacking competitive advantages such as TIM Consumer by mid-2025," the document said.

Also another activist investor, Bluebell Capital Partners, has proposed its own slate of candidates to TIM's board of directors and an alternative strategy.

Both Merlyn and Bluebell are looking to win support from TIM's top investor Vivendi, which has challenged the network sale in courts and questioned the sustainability of the business left behind.($1 = 0.9367 euros)

(Reporting by Elvira Pollina; Editing by Valentina Za)