Wednesday, 16 October 2019

TIM's revolving door brings stability, not upheaval...for now

By Mary Lennighan, for Total Telecom
Friday 27 September 19

Conti quits as boardroom tensions ease, but overseeing talks with Open Fiber could bring further turmoil for new chair

Changes in personnel, at management or board level, have historically been a sign of turbulence at TIM, but this week's announcement that chairman Fulvio Conti has tendered his resignation signals exactly the opposite for the Italian incumbent. Conti's decision to depart suggests new stability amidst the powers that be at TIM…

Changes in personnel, at management or board level, have historically been a sign of turbulence at TIM, but this week's announcement that chairman Fulvio Conti has tendered his resignation signals exactly the opposite for the Italian incumbent.

Conti's decision to depart suggests new stability amidst the powers that be at TIM.

Backed by activist investor Elliott Management, Conti took up the chairman role less than 18 months ago at a time of boardroom dispute, with Elliott repeatedly locking horns with TIM's biggest shareholder Vivendi over the telco's strategy.

A key sticking point between the two sides was TIM's fixed network asset. Elliott supported a plan to sell of the network, currently being spun off as netco, and merge it with that of wholesale fibre infrastructure player Open Fiber, a course of action also backed by the Italian government, while Vivendi strongly opposed such a move.

However, relations between the two factions thawed earlier this year and in June TIM confirmed that it planned to start talks with Open Fiber's owners, state-owned lender Cassa Depositi e Prestiti (CDP) and Enel,that could lead to the integration of the two networks and related businesses. CDP also owns just under 10% of TIM, incidentally.

"Conti stated that he believes his mandate has been completed, in light of the board [having] achieved stability in its operations," TIM said in a statement announcing the chairman's departure on Thursday.

The telco said its board will meet again on 21 October to discuss Conti's replacement. For now, Michele Valensise, who joined the TIM board in May 2018 alongside Conti, will serve as interim chairman.

Rumours over the identity of the new chair began even before the formal announcement of Conti's departure. Open Fiber chairman Franco Bassanini has already denied that he will take the job, according to Reuters.

Although the boardroom battles of the past couple of years appear to have drawn to a close, the new chairperson, whoever it may be, will have to lead TIM's directors through an interesting and potential tricky period. Brokering a deal to merge the network with Open Fiber will be far from easy; if anything, that's an understatement. It's all very well the two sides agreeing in principle that a single network makes good economic sense, but thrashing out the T&Cs will be a massive undertaking.

This new period of calm could be short lived.

Friday Review: 27 September 2019

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