The board of directors of Telecom Italia has approved a total restructuring of the firm. It is to be split in two, with one half focused on its mobile phone business TIM. The other will be a multi-media venture, including the fixed line phones, but concentrating on broadband with films for a home TV service available through an agreement with Fox.
Telecom Italia, under Chairman Marco Tronchetti Provera, had been integrating its mobile and fixed-line phone operations. Two years ago the company acquired the 44% of the mobile unit it did not already own for twenty billion euros. Telecom Italia is the euro zone’s fourth largest phone company. Turnover last year was 30 billion euros, behind Spain’s Telefonica at 38 billion, France Telecom at 49 billion and Deutsche Telekom at 59.6 billion euros. At the same time as announcing the restructuring, Telecom Italia said its net profit in the first half of the year fell by 16%.