VIVEF Vivendi (PK)

MILAN—Telecom Italia Chief Executive Marco Patuano is set to resign, a person familiar with the matter said Saturday.

The telecom operator's chairman, Giuseppe Recchi, will take over his role on an interim basis, the person added. The formal resignation is expected next week.

According to the person, Mr. Patuano, 51 years old, has had clashes with the company's board over the past year about some of his latest strategic decisions. He has been with the company for 25 years and has been chief executive since November 2013.

Telecom Italia's largest shareholder, French media company Vivendi, also disagreed with him, further aggravating the tensions.

Mr. Patuano couldn't immediately be reached Saturday for comment.

The Italian company is under pressure to deliver results after years of no revenue growth and strategic zigzagging. Vivendi, which held nearly 25% of Telecom Italia, the Italian firm's strategy since it gained four seats in Telecom Italia's board in December.

Telecom Italia has struggled to outline a fruitful strategy to deal with the twin challenges of a protracted economic downturn in Italy and fierce competition that has sent prices spiraling downward in the domestic market, which accounts for most of the group's business.

The Italian operator posted a €72 million net loss last year and falling revenue.

Disagreements with Mr. Patuano were expressed over the cost-cutting measures that Telecom Italia put in place recently. According to Vivendi's representatives, such measures weren't sufficient, the person added.

Vivendi also expected Telecom Italia to address strategic challenges such as whether the company should pursue a sale of its Brazil unit, people familiar with the matter previously said.

Whereas Vivendi previously expressed doubts about Mr. Patuano, the French company was expected to wait until the natural end of his mandate before proposing a change in the management, one person previously said.

Write to Manuela Mesco at manuela.mesco@wsj.com

(END) Dow Jones Newswires

March 20, 2016 21:35 ET (01:35 GMT)

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