Telecom Italia’s chief executive Marco Patuano has handed in his resignation following weeks of speculation over his future, three sources close to the matter said on Saturday.
His decision comes as Telecom Italia’s top shareholder Vivendi exerts a growing influence over the company.
Patuano’s resignation would be formalised within the next two to three days, another source added. Patuano, whose mandate was due to expire in April 2017, was not immediately available for comment.
Flavio Cattaneo, currently CEO of Italian railway firm NTV and a Telecom Italia board member, is favourite to succeed Patuano, other sources, who declined to be named, told Reuters.
NTV declined to comment and Cattaneo was not immediately available for comment.
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The rest of Telecom Italia’s board will remain in place and Chairman Giuseppe Recchi will stand in as CEO until a replacement for Patuano is found, two sources said. Patuano’s severance pay would be around 7 million euros, one added.
Reports that Patuano, 51, might leave following pressure for a restructuring from Vivendi which is led by business tycoon Vincent Bollore, had been circulating for weeks.
Patuano’s relations with Vivendi were tense from the start, a source close to the matter told Reuters earlier this month.
Vivendi was not immediately available for comment on Patuano’s resignation on Saturday.
The French group took just over 8% of Telecom Italia in June as part payment for selling Brazilian broadband firm GVT to Spain’s Telefonica, which at the time was Telecom Italia’s biggest shareholder.
Vivendi has since tripled its stake to 24.9%, putting Patuano under pressure to cut costs at home and decide what to do with Brazilian business, TIM Participacoes, which sources have told Reuters Vivendi is pushing for a sale of.
Patuano, who started his career in Telecom Italia in 1990 from university and worked his way up through the ranks before taking over as CEO, has stepped up spending on faster fixed and mobile networks as Rome seeks to get internet connections across Italy up to speed with the rest of Europe.
He has also struck deals with content providers such as Sky Italia, Netflix (NFLX), and Mediaset in a search for new sources of income and to better compete with rivals. But industry insiders say the changes were not happening quickly enough for Vivendi.
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Telecom Italia has seen revenues decline steadily amid tough competition in its mature home market, which is just emerging from a protracted recession, and is now grappling with an economic downturn and currency devaluation in Brazil.
Analysts say Vivendi’s interest might lead to a tie-up between Telecom Italia and another telecoms or media operator.
So far the French group has only said that it wants to use Telecom Italia to develop its existing businesses in southern Europe and boost its content offering.