Gubitosi out, Labriola in as GM as Vivendi and other TIM investors balk at takeover plans
Telecom Italia (TIM) CEO Luigi Gubitosi resigned his position on Friday as CEO and general manager of the company, but stays on the board of directors in the latest executive shakeup at the troubled telco. Gubitosi’s responsibilities have been divided between Pietro Labriola, head of TIM Brazil, who steps in as GM, and board chairman Salvatore Rossi. Rossi will also lead a special committee to find a permanent replacement for TIM’s CEO.
In a letter to the company’s board of directors, Gubitosi announced his resignation and said that he did not want to be an impediment to the consideration of American global investment firm KKR’s reported US$12 billion takeover bid for TIM. KKR reportedly plans to take the business private. Some investors, including significant stakeholder Vivendi, feel the offer is undervalued.
Reuters reports that Gubitosi’s resignation is a tactical decision to keep Labriola from the CEO’s desk. Gubitosi remained on the board, which prevents Labriola from joining the board and thus being named CEO. It also reports that private equity firms Advent and CVC are also in play for TIM, with CVC exploring a partnership with KKR.
Gubitosi has been under fire to turn the ailing Italian telco around and has repeatedly clashed with other board members and investors, including French media company Vivendi, which currently holds a 24% stake. Telecom Italia has seen shrinking revenue amidst fierce domestic competition and expanded infrastructure costs as the company transitions its business to 5G.
Despite executive woes, TIM plans for 5G future
TIM lowered guidance last month following cuts in July. Gubitosi told analysts in November to look for a partial sale of Noovle, TIM’s cloud computing business, in late 2022. Noovle is Telecom Italia’s push into the lucrative cloud enterprise market. TIM acquired Google Cloud partner Noovle Srl in 2020, combining it with TIM’s own data center operations to create the new business earlier this year. At the time of the announcement, TIM said that its 17 existing data centers will be joined by six others under Noovle’s direct aegis.
Executive turmoil isn’t putting a damper on Telecom Italia’s modernization efforts. TIM Group, Noovle, and Oracle announced plans in October to develop multi-cloud services for Italy aimed at Italian enterprises and public sector groups. The services will be offered through Noovle. TIM Group will focus on selling burgeoning 5G and IoT services to Italian enterprises and government. The system is built on Oracle’s Cloud Infrastructure platform. Oracle also announced that the company selected its Oracle Fusion Cloud Enterprise Resource Planning (ERP) system for finance and supply chain optimization.
