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Telecom Italia restructuring plan fall-out claims Prodi adviser's scalp


Telecom Italia restructuring plan fall-out claims Prodi adviser's scalp


The shockwaves from Telecom Italia’s radical shift of strategy continue to ripple out. After chairman Marco Tronchetti Provera suddenly resigned, accusing the government of interference, now an economic advisor to Prime Minister Romano Prodi has quit.

The adviser, Angelo Rovati, stepped down after Prodi’s critics accused the PM of wanting to renationalise former state controlled industries. Rovati wrote a report and sent it to Tronchetti, that recommended the state should buy part of Telecom Italia’s fixed-line network.

Rovati said: “Two things convinced me to resign; Tronchetti’s resignation which moves us closer to clearing the air in this business and secondly, the government’s announcement which I agree with that the situation of Italy’s telecommunications sector be discussed in parliament.”

The controversy hit the headlines after Telecom Italia last week unveiled plans to split its fixed-line operation and its mobile -phone unit, TIM, into separate companies. Tronchetti said he quit because of a breakdown in relations between Telecom Italia and Prodi’s government which is against any sale of the TIM mobile phone arm, as he does not want it to fall into foreign hands.

Telecom Italia, with turnover of 30 billion euros last year, has 72% of the country’s fixed line market, 40% of mobile phones and nearly 7.9 million broadband customers. The company’s debt is 42 billion euros. Reducing that debt is the reason why TIM might be sold. The new chairman, Guido Rossi, has pledged to follow the restructuring plan announced last week. It was Rossi who over saw the privatisation of Telecom Italia in 1997.

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