Telecom Italia Names Cattaneo as New CEO

Telecom Italia has named Flavio Cattaneo as its new CEO following the resignation of Marco Patuano last week. (See Patuano to Quit as Telecom Italia CEO.)

Cattaneo was previously the CEO of high-speed train operator Ntv as well as chairman of Italian real estate company Domus Italia. He has also been an independent director at Telecom Italia (TIM) since April 2014.

Earlier roles have included the leadership roles at energy group Terna and Italian state broadcaster RAI between 2003 and 2005.

Patuano appears to have been ousted after clashing with Vincent Bolloré, the chairman of French media and telecom conglomerate Vivendi , which controls 25% of Telecom Italia.

Bolloré had reportedly been unhappy with the pace of restructuring efforts under Patuano, and Cattaneo may soon find himself under pressure from Vivendi to negotiate a sale of Telecom Italia's business in Brazil.

He is likely to have a difficult job ahead of him in meeting Vivendi's demands without upsetting groups in Italy, including the country's powerful trade unions, which have resisted management efforts to cut employee numbers.

Last month, Telecom Italia was reported to be targeting voluntary redundancies for about 3,300 Italian workers, and looking to slash another 250 jobs, but this would represent just 8% of the company's bloated Italian workforce in total.

In the meantime, the operator has struggled to cope with a number of competitive, economic and regulatory challenges. On a constant-currency basis, its revenues fell by 4.6% in 2015, to €19.7 billion ($22.3 billion), while EBITDA sank by 17.9%, to around €7 billion ($7.9 billion).

The operator is accelerating investments in the rollout of high-speed fixed-line and mobile networks in a bid to rekindle growth, but a fresh broadband challenge emerged only last week with the news that Italian energy group Enel SpA is to spend €2.5 billion ($2.8 billion) on the deployment of a fiber-to-the-home network. (See Eurobites: Italy's Enel in $2.8B FTTH Plan.)

Having already signed agreements with Italian service providers Vodafone Italy and Wind Telecomunicazioni SpA , Enel could to pose a major wholesale threat to Telecom Italia.

For more fixed broadband market coverage and insights, check out our dedicated Broadband content channel here on Light Reading.

Like other big European operators, Telecom Italia is trying to overhaul its networks and operations amid growing competition from so-called over-the-top players like Google (Nasdaq: GOOG) and Facebook , whose digital communications offerings have been partly responsible for the decline in traditional telco revenues.

Yet Michele Gamberini, Telecom Italia's head of core network and infrastructure, recently admitted at an industry conference that digital transformation was a hurdle the operator was struggling to overcome. (See Telecom Italia Not Ready to Transform, Admits Exec.)

With his background at utility companies and traditional "brick and mortar" businesses, Cattaneo may have his work cut out in persuading critics he is the man to lead Telecom Italia's digital transformation.

Vivendi must hope Cattaneo's experience in the broadcasting industry will prove valuable as Telecom Italia introduces new video and content services, but Cattaneo does not appear to have worked in broadcasting for more than a decade, during which time that sector has changed beyond recognition.

Telecom Italia's share closed down 0.3% on the Milan stock exchange today.

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

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