New shareholders of Telecom Italia approve business plan

Telecom Italia's new shareholders finally started its work, voting in a new management team to lead Europe's No. 5 telecommunications company.

Photo: New shareholders of Telecom Italia approve business plan

The board approved Franco Bernabe as chief executive and Gabriele Galateri as the new chairman, ushering in a new era at Italy's largest telecoms operator.

Bernabe, 59, currently vice chairman of Rothschild Europe, ran Telecom Italia briefly in 1998. He also was CEO of Italian energy company Eni SpA from 1992-1998.

Galateri, 60, was chairman of the Italian merchant bank Mediobanca until last June.

Bernabe told a news conference that he was more interested in acquisitions than with spinning off any Telecom Italia assets - but said future strategic plans would be laid out by the new board.

"I am more concerned about buying than spinning off," Bernabe said.

Telecom Italia has been in limbo since April when Spain's Telefonica and four major Italian financial investors reached a 4.1 billion EUR(US$5.8 billion) deal to assume control of Telecom Italia.

The transfer of control was held up six months by regulatory controls and disagreements among the Italian shareholders over who should take the helm.

Paving the way for the new appointments, Chairman Pasquale Pistorio, Deputy Chairman Carlo Buora and Chief Executive Riccardo Ruggiero handed in their resignations last week.

This marks the third change of management in the past 15 months, following the resignation of former Chairman Marco Tronchetti Provera in 2006 over disagreements with the government about Telecom Italia's strategy - in particular his plans to spin off the mobile operator Tim. He then moved to sell his controlling stake.

The current controlling shareholders, with a combined 24 percent stake, are Telefonica, Intesa Sanpaolo, Assicurazioni Generali SpA, Mediobanca SpA and one of the Benetton family's holding companies, Sintonia SA.

Telecom Italia shares closed down 0.25 percent at 2.16 EUR(US$3.17) on the Milan stock exchange.

The naming of new management allows the company to move ahead with strategic planning in an era when all the major telecommunications companies are seeing revenues squeezed as traditional fixed line calls become cheaper.

Among the issues that need to be addressed are efforts by Italy's regulator to get the former telecom monopoly to place its fixed-line network in a separate division and guarantee equal access to all competitors, in line with EU policy. Negotiations have been going on for more than a year.

Bernabe said he intends to quickly open talks with the regulator.