Telecom Italia topper exits amid biz divide
Plan to proceed sans Provera
The trouble for Tronchetti Provera started last Monday, when he announced a new strategy to split the heavily indebted company into three parts and focus the core business on broadband and media services. Tronchetti Provera's plan meant Telecom Italia Mobile, the country's largest mobile phone company, would be vulnerable to outside takeover specialists, a move that angered Italy's center-left government.
The Italian government is loath to let such a highly prized business as TIM fall into foreign hands. During a trip to China, Prime Minister Romano Prodi openly questioned Tronchetti Provera's restructuring plan. In a highly unusual move, Prodi dropped a bombshell revelation with reporters: that Telecom Italia recently had been negotiating with Rupert Murdoch's News Corp., Time Warner and General Electric.
Feeling the heat from the government, Tronchetti Provera stepped down Friday night after the stock market closed. His abrupt resignation has drawn fire from Prodi's political opponents, demanding Prodi face a parliamentary inquiry. Former prime minister and media tycoon Silvio Berlusconi accused Prodi of political interference that could damage Italy's chances of attracting outside investors. "It's at odds with the free market," said Berlusconi, the controlling shareholder of Mediaset.
To Prodi, the purpose of revealing the market-sensitive news was to establish his position that he thought Telecom Italia had other options, possibly a tie-up with a media company that would keep the firm a majority-owned Italian company.
Telecom Italia board member Jean Paul Fitoussi told Reuters this weekend that the board had considered allowing Murdoch to take a small stake in the telecoms group, but he did not elaborate on whether that option still remained alive.
Even without Tronchetti Provera, the company intends to proceed with the controversial plan to split up the company. "Nothing will change," Fitoussi told Reuters.
Tronchetti Provera's replacement is the highly esteemed attorney Guido Rossi, a former Telecom Italia chairman who this summer was appointed to preside over the Serie A pro soccer match-fixing investigation.
