ROME/MILAN (Reuters) - Telecom Italia (TLIT.MI) Chief Executive Flavio Cattaneo on Tuesday sought to quash speculation he might soon leave the phone group due to disagreements with top shareholder Vivendi (VIV.PA) as sources said tensions remained.
Cattaneo took over as CEO a little more than a year ago, earning praise from the French media group and other investors for cutting costs at the heavily indebted firm.
But in recent weeks he has engaged in a heated exchange with government officials over the rollout of ultrafast broadband across Italy, ruffling feathers at Vivendi.
Speaking to reporters on the sidelines of an event in Rome, Cattaneo denied there were any tensions with Telecom Italia’s shareholders, its board or the group’s chairman Arnaud de Puyfontaine, who is also Vivendi’s chief executive.
Cattaneo said rumours he might leave were false and said he would remain at Telecom Italia until the end of his mandate in 2020.
However, a source familiar with the matter said tensions with Vivendi persisted. A second source said the situation might soon be coming to a head.
Telecom Italia declined to comment.
ASATI, an association of small investors in Telecom Italia, on Tuesday urged the company to make its position clear.
“Should such rumours turn out to be true ... the company should speak up as soon as possible through its chairman,” ASATI said in a note.
Telecom Italia shares fell 1.8 percent on Monday with traders citing speculation about the governance clash as a reason for the fall. The stock closed down 0.3 percent on Tuesday, in line with the market.
Cattaneo, 54, was appointed last year after his predecessor resigned over strategy clashes with Vivendi. The French firm, controlled by billionaire Vincent Bollore, backed Cattaneo’s promotion to CEO from board member.
Telecom Italia has been at loggerheads with Rome over the roll out of superfast internet in so-called non-economically viable areas.
The phone group’s decision not to invest in areas where it said it could not guarantee a return on its investment forced Rome to hold state subsidised tenders from which utility Enel (ENEI.MI) emerged as the government’s broadband partner.
But Telecom Italia later said it would invest its own money in some of those areas, arguing the market had changed. This shift angered Rome, which claimed it undermined the state tenders.
Reporting by Alberto Sisto, Giancarlo Navach and Paola Arosio; Editing by David Evans and Edmund Blair