MILAN (Reuters) – Telecom Italia (TIM) (TLIT.MI) CEO Amos Genish said tensions between the company’s management, its board and shareholders were counterproductive, but said he was committed to staying, according to an excerpt of an interview with La Repubblica.
Telecom Italia CEO Amos Genish gestures during a debate at the RAI state television headquarters in Rome, Italy November 10, 2017. REUTERS/Remo Casilli
TIM’s top shareholder Vivendi (VIV.PA) has been at loggerheads with Elliott since the activist fund took a stake in Italy’s biggest phone group this year and ended up wrestling board control away from the French media group in May.
The battle of words has intensified in recent months as TIM fell under pressure due to tougher competition at home, which prompted speculation that Genish’s position could be at risk.
Shares in TIM are down about 30 percent so far in 2018, worse than a 15 percent fall in the European telecoms index .SXKP.
In an excerpt of an interview to be published in full on Monday, Genish pledged to push ahead with a strategy focused on a transition toward fifth-generation mobile services.
But he said there was a “problematic situation” within TIM that was “creating a lot of trouble and is becoming unsustainable”.
Vivendi reaffirmed its support this week for Genish and accused Elliott of running a “rumor campaign” to discredit him.
The attack follows a similar move last month when Vivendi said TIM’s performance had been “disastrous” since Elliott seized control of the Italian firm’s board.
Elliott has said Vivendi had “fallen prey to the ‘short-termism’ it has previously decried”, casting judgment on the new board just four months after it was appointed. It also urged Vivendi to work on constructive solutions at board level.
Genish told La Repubblica “greater alignment between shareholders, management and the board were needed” to support the company’s growth.
Under Genish, who was appointed when Vivendi controlled the board, TIM is working on a three-year turnaround plan focusing on a digital transformation and fixing the group’s finances.
The former state phone monopoly has been facing growing challenges in fixed-line and mobile businesses as broadband group Open Fiber rolls out a rival fiber optic network and after French telecoms group Iliad (ILD.PA) entered Italy in May with a low-price mobile offer.
Separately, a source familiar with the matter told Reuters TIM had mandated Enrico Laghi, a business professor in Rome and one of three administrators looking after struggling airline Alitalia, to review the valuation of the phone group’s assets.
Such review could result in a writedown of some of TIM’s infrastructure, including its copper and fiber networks, that could weigh on its profits, La Repubblica said on Saturday.
Reporting by Agnieszka Flak; Editing by Edmund Blair