Telecom Italia CEO to Quit Next Week – Report

Telecom Italia CEO Flavio Cattaneo is set to quit in the next few days after falling out with Vivendi, the operator's biggest shareholder, according to a report from Reuters.

The update comes after Cattaneo was more widely reported to have clashed with Vivendi over Telecom Italia's broadband strategy.

The French media conglomerate, which owns a 24% stake in Telecom Italia, appears concerned that Cattaneo's determination to build broadband networks in rural areas has upset relations with the Italian government.

Authorities appear to be angry that Telecom Italia (TIM) is pursuing its rural deployment after withdrawing from a public tender that was eventually awarded to energy company Enel.

In June, authorities were reported to have said that Telecom Italia's move would damage public interests and threatened to seek compensation from the operator. (See Telecom Italia in Broadband Clash With Govt – Reports.)

In response, Cattaneo said the government's attack was "worthy of a dirigiste state," insisting that Telecom Italia was "a private company and in Italy companies are free to do business," according to Reuters.

Four sources have now told Reuters that Cattaneo's departure will be announced by July 27 when the operator publishes results for the first six months of the year.

They also said that Amos Genish, currently Vivendi's chief convergence officer, will be appointed Telecom Italia's managing director.

According to an earlier report from Bloomberg, Vivendi has been upset by Cattaneo's "politically charged" comments, while Cattaneo no longer believes he can run Telecom Italia in the way he wants.

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Having taken over at the Italian incumbent in March last year, Cattaneo has embarked on a major efficiency drive at the company while channeling investments into the rollout of higher-speed fixed and mobile services. (See Cattaneo Spearheads Telecom Italia Revival.)

Telecom Italia has shown signs of revival under his leadership, with overall sales up in Italy and Brazil in the first quarter and earnings boosted by cost-saving measures.

The second-quarter report that Telecom Italia issues on July 27 is expected to show a return to service revenue growth in the Italian market.

Telecom Italia's share price has risen 16% in Milan since this time last year.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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