Is the Italian island phone firm turning over capital? (7)
I believe the answer is:
tbilisi
'capital?' is the definition.
(capital of georgia)
'is the italian island phone firm turning over' is the wordplay.
'the italian' becomes 'il' (the in Italian).
'island' becomes 'i'.
'phone firm' becomes 'bt' (UK telecommunications company).
'turning over' says the letters should be written in reverse.
'is'+'il'+'i'+'bt'='isilibt'
'isilibt' back-to-front is 'TBILISI'.
(Other definitions for tbilisi that I've seen before include "Capital city of Georgia" , "Georgian capital" , "Georgian place" , "Georgian city" .)