Telecom Italia Names Cattaneo CEO as Carrier Seeks Revampby
Biggest shareholder Vivendi pushing for change at carrier
Previous chief executive Marco Patuano resigned on March 21
Telecom Italia SpA named Flavio Cattaneo chief executive officer, turning to a media industry veteran to implement a turnaround at Italy’s biggest phone company.
The board announced the appointment in a statement Wednesday. Cattaneo, 52, succeeds Marco Patuano, who was ousted March 21 after clashing with Telecom Italia’s largest shareholder, Vivendi SA, the French company controlled by Chairman Vincent Bollore.
Cattaneo previously ran broadcaster RAI, an experience that will come in handy as Bollore pushes for deeper ties between Telecom Italia and entertainment companies such as Silvio Berlusconi’s Mediaset SpA. Billionaire Bollore led the push to oust Patuano and the French media company was involved in interviewing candidates for his replacement, people familiar with the matter have said. Cattaneo is currently CEO of Rome-based high-speed train operator Nuovo Trasporto Viaggiatori SpA.
The new CEO needs execute Bollore’s vision of building a media and telecommunications powerhouse that offers phone and Internet access as well as TV shows, music, and movies in southern Europe. He will also need political and deal-making skills to navigate Italy’s power structure, while overseeing a transformation that may also include a sale of Telecom Italia’s troubled Brazilian unit.
Among Cattaneo’s challenges will be to make Telecom Italia more international, and to focus not just on network infrastructure but also on premium content, said Fabio Troiani, managing director at consulting firm Business Integration Partners in Milan.
In addition to his background in broadcasting, Cattaneo sits on Telecom Italia’s board, giving him experience in the two industries Bollore is seeking to combine. Vivendi, whose businesses include Universal Music and the Canal Plus broadcasting operations, has been pushing Telecom Italia management to transform the carrier into a media group with a distinct focus on southern Europe.
Patuano, 51, resigned after clashing with Vivendi on matters including the Brazilian unit, which Vivendi is open to selling, people have said. Patuano and his allies were more committed to staying in Brazil for the long term, people have said.
The CEO change is set to put Bollore, who has a record of activism, more firmly in charge as he presses Telecom Italia to cut costs and focus on southern Europe. As part of his plan to extend Vivendi’s reach, he is also discussing an exchange of shares with Italian media company Mediaset, people familiar with the negotiations said in March. Berlusconi, who controls Mediaset, said on March 21 that Vivendi is interested in Mediaset’s content rather than buying the company.
Telecom Italia chairman Giuseppe Recchi, who led the search to find Patuano’s successor, also was given additional responsibilities, according to the company’s statement. He will supervise security issues, oversee Telecom Italia Sparkle SpA as well as brand and media strategy.
Bollore has been upping the pressure on Telecom Italia for months while steadily raising Vivendi’s stake in Italy’s biggest phone carrier to 24.9 percent. Telecom Italia shares fell 0.3 percent to 95.4 euro cents in Milan, giving the company a market value of 17.6 billion euros.