Given the company’s troubles, Vivendi (VIV.PA), Telecom Italia’s top investor, sees the present CEO as a short-term solution, according to two people close to the French media giant.
TIM CEO Luigi Gubitosi survived a boardroom brawl on Thursday at a meeting called by Vivendi in response to two profit warnings in three months, but the French conglomerate is still questioning his role.
According to one of the individuals, the board meeting demonstrated that Vivendi’s concerns are well-founded and that management lacks a clear strategy on how to respond to these concerns.
Reuters received information from three different sources. Vivendi prefers TIM Brasil CEO Pietro Labriola to succeed Gubitosi as TIM chairman. Vivendi did not respond to a request for comment on this matter.
Telecom Italia did not respond to a request for comment right away.
Vivendi owns 24 percent of TIM, putting it at risk of a capital loss of 1.8 billion euros ($2.06 billion) at current market levels.
Gubitosi highlighted to the board strategies to solve TIM’s difficulties, including ways to extract value from its critical network assets, after failing to prevent a persistent revenue drop in TIM’s saturated home market.
Innovation Minister Vittorio Colao, a former Vodafone boss tasked by Prime Minister Mario Draghi with implementing plans to boost Italy’s ultra-fast connections, is expected to play a key role in deciding the future of TIM and its CEO.
Colao has poured cold water on a project championed by the Treasury under Italy’s previous government to merge TIM’s fixed-line access network with that of state-backed rival Open Fiber.
Sources have said Gubitosi has been trying to revive the plan by convincing Vivendi that TIM should cede control of the merged entity, an option the French group has so far opposed.
