With new CEO, Telecom Italia ‘opera’ edges towards finale

MILAN (Reuters) – Barely a year into the job as the boss of Italy’s biggest telecoms company, Amos Genish had just finished celebrating a joint venture with electronics group Samsung at a dinner in South Korea when a WhatsApp message arrived sealing his fate.

The Telecom Italia CEO had been in conflict with some of his fellow board members over strategy at the former state phone monopoly but the company had said there would be no board meeting while he was away.

“Amos, the board has been called for tomorrow morning at 7 to resolve on the revocation of your delegation of power. I’m sorry it happened when you’re out,” read the message, a copy of which has been viewed by Reuters.

Twelve hours later, the telecoms industry veteran was fired in a board meeting he dialled into from Seoul. He was the third CEO to leave the group in as many years and his successor was chosen on Sunday.

The new CEO, Luigi Gubitosi, is backed by U.S. activist investor Elliott Management, which had pushed for the spin off of the company’s fixed line network (NetCo) and the sale of other assets, shifting the focus from the operational turnaround pursued by Genish.

The sacking, which Genish called a Soviet-style putsch, was the latest twist in a corporate drama that one board member described in an email as an “opera”.

In theory, it paves the way for Elliott’s plan. But conversations with sources both inside and close to the company show that in practice there may be many more twists to come.

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The underlying plot pits Elliott against TIM’s main shareholder, French media group Vivendi, over how to revive an underperforming business whose shares have dropped 27 percent this year alone.

The outcome will decide both the future of TIM and whether Italy can overcome the digital divide that separates it from more advanced economies in Europe.

Genish, who was appointed by the French investor last year, wants TIM to keep control of the network, deeming it strategic both to the deployment of fifth-generation (5G) mobile services and to the survival of the company’s service operations.

Elliott, which took control of the board in May, has an ally in Italy’s anti-establishment government elected in June, which has prioritized the creation of a single broadband network to help Italy catch up digitally with European peers.

A new draft amendment to a government fiscal decree, seen by Reuters on Friday, aims to advance the project via incentives to twin TIM’s network with small, state-backed rival, Open Fiber.

“All the stars are aligned, this is a massive project and it needs to be pursued, you can’t say you won’t do it because there are risks associated with it,” a source familiar with the matter said of Genish.

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