November 18, 2018 / 7:58 PM / 22 days ago

CORRECTED-UPDATE 1-Telecom Italia appoints Luigi Gubitosi as CEO

(Corrects paragraph 1 to say Gubitosi’s appointment is ‘portending’ a shake-up at TIM, rather than pre-empting it)

By Giselda Vagnoni

ROME, Nov 18 (Reuters) - Telecom Italia (TIM) appointed veteran Italian manager Luigi Gubitosi as chief executive by a majority vote on Sunday, in a move seen as portending a more aggressive shake-up at Italy’s biggest phone group.

He succeeds Amos Genish, the third TIM CEO to leave in as many years, who was unexpectedly fired this week over what sources said were disagreements with board members over strategy.

Gubitosi, a former head of telecoms group Wind and now state-appointed commissioner of struggling airline Alitalia, had been one of the independent directors which activist fund Elliott appointed to the TIM board when it wrested control from top shareholder Vivendi.

Coming out of the board meeting that sealed his appointment, Gubitosi said TIM had a great history and great expertise to “win market challenges, boost cash-flow generation, cut debt and examine with care and speed the project for the creation of a single network.”

Genish had been pursuing a three-year turnaround plan, focusing on a digital transformation and fixing TIM’s finances, but some Elliott-appointed directors wanted him to put higher priority on a possible spin-off of its fixed-line networks and asset sales, sources familiar with the matter have said.

The spin-off could pave the way for the creation of a single broadband infrastructure company in Italy, combining TIM’s network with that of smaller, state-backed broadband rival, Open Fiber.

Italy’s government, which came into power in June, has placed the creation of a fast broadband network at the heart of its industrial policy and is drafting measures to help create one single network company.

After his appointment as CEO, Gubitosi will no longer be an independent director and will give up his role on the company’s control and risk committee, TIM said in a statement. (Reporting by Giselda Vagnoni, writing by Agnieszka Flak, Editing by Robin Pomeroy)

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