Telecom Italia Names CEO Amid Turmoil
March 31 2016 - 3:02AM
Dow Jones News
(FROM THE WALL STREET JOURNAL 3/31/16)
By Manuela Mesco
MILAN -- Telecom Italia SpA said Wednesday it has appointed
Flavio Cattaneo, currently chief executive of train operator NTV
SpA-Nuovo Trasporto Viaggiatori, as the new CEO of Italy's largest
telecommunications operator.
Mr. Cattaneo will succeed Marco Patuano, who resigned earlier
this month amid clashes with Telecom Italia's board and its largest
shareholder, France's Vivendi SA, which has built up a 24.9% stake
in the Italian company.
The board's decision to appoint Mr. Cattaneo is a step toward a
much-needed turnaround for Telecom Italia, according to a person
familiar with the matter, after years of declining revenue and high
debt.
The telecom operator has struggled with a lack of a clear
strategic direction to cope with the challenges of a protracted
economic downturn in Italy and harsh competition that has sent
prices spiraling downward in the domestic market, which accounts
for most of the group's business.
According to the person familiar with the matter, the need for a
turnaround became evident in recent months, as the board grew
increasingly disappointed with the former chief executive's
approach.
Mr. Patuano -- who had served as the company's CEO since
November 2013 -- was able to keep such tensions under control until
recently. Clashes became more open after Vivendi gained four seats
on Telecom Italia's board in December and started to exert a
stronger influence in the boardroom.
The person familiar with the matter said the main sources of
tension were poor financial results at Telecom Italia -- which in
2015 turned in one of the worst performances in the European
telecom sector -- and the way regulatory issues were addressed.
Telecom Italia recently was fined for unfair competition
practices, and regulators urged a change in the way the company
handles regulatory issues.
Another person familiar with the matter has said Vivendi was
pushing for stronger cost-cutting measures.
(END) Dow Jones Newswires
March 31, 2016 02:47 ET (06:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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