Telecom Italia (TIM) has finally announced that Pietro Labriola is to take on the role of CEO – news that has been widely expected since Luigi Gubitosi stepped down from the position late 2021.
Although Labriola was appointed general manager of TIM Group in November 2021 in order to ensure continuity following Gubitosi's departure, chairman Salvatore Rossi took over Gubitosi's remaining powers for the time being.
Labriola has now taken over all CEO and general manager functions, the group confirmed. The appointment also leaves a vacancy at TIM Brasil, where Labriola has served as CEO for the last three years.
Labriola is a long-serving TIM executive, having joined the group in 2001. He previously held positions at Infostrada, Boston Consulting Group, Cable & Wireless and France Telecom (now Orange).
The freshly minted CEO will be more than aware of the precarious nature of the position he has just taken on. Indeed, his predecessor Gubitosi was TIM's fourth CEO in six years. And Labriola is taking the helm at an extremely challenging time for the Italian incumbent.
For one thing, prior to his departure Gubitosi had been engulfed in an acrimonious boardroom dispute over the future strategy of TIM, particularly in relation to the contentious plan to create a single fiber network in Italy.
French media giant Vivendi, which holds a 24% stake in TIM, had questioned the role of Gubitosi following two profit warnings in three months, for example.
US-based investors KKR then launched a possible public tender offer for TIM's entire share capital, "aimed at the delisting of the company."
Labriola has in fact already been active behind the scenes: Reuters reported last week that he has outlined a plan offering alternative options to the takeover bid by KKR. According to the report, Labriola has proposed separating TIM's infrastructure assets from its services operations.
Such a move would pave the way for the merger of TIM's fixed network assets with those of Open Fiber, as advocated by state investor CDP. That in turn would lessen the chances of KKR succeeding in its bid. The investor would still be involved in any reorganization of TIM's fixed assets as it owns a 37.5% stake in TIM's fiber company FiberCop.
TIM recently said it was undergoing a "thorough assessment" of the takeover bid from KKR. Gubitosi, when CEO, reportedly criticized TIM directors for stalling on KKR's offer because of shareholder pressure. Vivendi, for example, believes KKR's offer does not adequately value TIM.
Meanwhile, TIM could face even more pressure on the already highly competitive Italian market. Reports suggest that Iliad and Vodafone are in talks over a possible merger of their respective Italian units.
That would mean Italy would have three mobile network operators including WindTre – which itself is the product of a merger between 3 Italy and Wind.
What's more, Iliad Italia is widely expected to launch a new fixed offer with effect from tomorrow.
The operator, owned by France's Iliad group, has already turned the mobile market on its head with a highly competitive offer. It remains to be seen what it might have up its sleeve for the fixed market.
- Eurobites: TIM under pressure to name new CEO – report
- Ex-CEO Gubitosi steps down from TIM board
- Misfortune dogs Telecom Italia as earnings outlook dims
- Telecom Italia preps for KKR review with exec reshuffle
- Telecom Italia CEO quits as KKR circles
- Telecom Italia faces $12.2B privatization bid from KKR
— Anne Morris, contributing editor, special to Light Reading