TI Telecom Italia S.P.A. New

   (FROM THE WALL STREET JOURNAL 3/31/16) 
   By Manuela Mesco 

MILAN -- Telecom Italia SpA said Wednesday it has appointed Flavio Cattaneo, currently chief executive of train operator NTV SpA-Nuovo Trasporto Viaggiatori, as the new CEO of Italy's largest telecommunications operator.

Mr. Cattaneo will succeed Marco Patuano, who resigned earlier this month amid clashes with Telecom Italia's board and its largest shareholder, France's Vivendi SA, which has built up a 24.9% stake in the Italian company.

The board's decision to appoint Mr. Cattaneo is a step toward a much-needed turnaround for Telecom Italia, according to a person familiar with the matter, after years of declining revenue and high debt.

The telecom operator has struggled with a lack of a clear strategic direction to cope with the challenges of a protracted economic downturn in Italy and harsh competition that has sent prices spiraling downward in the domestic market, which accounts for most of the group's business.

According to the person familiar with the matter, the need for a turnaround became evident in recent months, as the board grew increasingly disappointed with the former chief executive's approach.

Mr. Patuano -- who had served as the company's CEO since November 2013 -- was able to keep such tensions under control until recently. Clashes became more open after Vivendi gained four seats on Telecom Italia's board in December and started to exert a stronger influence in the boardroom.

The person familiar with the matter said the main sources of tension were poor financial results at Telecom Italia -- which in 2015 turned in one of the worst performances in the European telecom sector -- and the way regulatory issues were addressed.

Telecom Italia recently was fined for unfair competition practices, and regulators urged a change in the way the company handles regulatory issues.

Another person familiar with the matter has said Vivendi was pushing for stronger cost-cutting measures.

(END) Dow Jones Newswires

March 31, 2016 02:47 ET (06:47 GMT)

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