By Elvira Pollina and Giuseppe Fonte
MILAN/ROME (Reuters) – Telecom Italia’s top investor Vivendi wants to play a bigger role at Italy’s largest telecoms group, calling into question the position of CEO Luigi Gubitosi after two profit warnings in the span of months, two sources close to the matter said.
French media giant Vivendi, which holds a 23.8% stake in Telecom Italia (TIM), wants to discuss proposals to relaunch the group and extract value from its key landline grid with the Italian government, they added.
Vivendi declined to comment, reiterating its commitment to contribute to the long term success of TIM.
TIM declined to comment.
Italian state lender Cassa Depositi e Prestiti (CDP) is TIM’s second-largest shareholder through a 9.8% holding, which has been built in the past years to oversee its network assets, deemed as strategic by authorities in Italy.
Piling pressure on Gubitosi to reorganise TIM and turnaround its business, Vivendi has managed to get an extraordinary board meeting on Nov. 11, sources have said, after it expressed its disappointment at a board meeting last week.
Earlier this year, Vivendi and CDP both backed a slate of nominees to appoint TIM’s board of directors, confirming Gubitosi as CEO and former Bank of Italy official Salvatore Rossi as chairman.
But since then, TIM has issued two profit warnings due to weak performance of its key domestic business, giving the French group leeway in its push for changes.
TIM’s stock has lost 17% since the beginning of the year against a 23% rise in Milan’s blue-chip index.
With talks still ongoing, it remains to be seen how Vivendi’s demands will be met, the sources said.
A key issue is the future of TIM’s landline infrastructure.
Under former Italian Prime Minister Giuseppe Conte, TIM agreed a plan championed by the Treasury to merge its fixed-line access network with those of state-backed rival Open Fiber.
However, key figures in the current ruling coalition led by Prime Minister Mario Draghi, including Innovation Minister Vittorio Colao, poured cold water on the plan, which envisaged TIM owning more than 50% of the new entity.
In the past few months, Gubitosi had been trying to persuade Vivendi that handing control to CDP on any network combination with Open Fiber was the only way to revamp the plan and offset political resistance, the two sources said.
(Reporting by Elvira Pollina and Giuseppe Fonte; Editing by Alexander Smith)
