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Chairman of Italian telecom firm quits amid controversy

AP, Rome

Telecom Italia SpA chairman Marco Tronchetti Provera resigned on Friday, Italian news agencies and state TV reported, amid mounting criticism over plans he announced earlier in the week to reorganize the company.

The development came two days after Italy's telecommunications watchdog summoned the company's management to discuss the plan, which would separate the company's mobile telephone unit, TIM.

The ANSA and Apcom news agencies reported that the board of the nation's largest telephone company had named Guido Rossi to succeed Tronchetti Provera, who is one of Italy's most influential industrialists.

But Dow Jones Newswires, citing unidentified sources, reported that the board, still meeting, was still mulling over the choice of Rossi, who was previously a senior executive at Telecom Italia.

The board meeting, in Milan, was unexpected.

Rossi, a former senator and former chief of the Italian stock market regulator, is a widely respected figure who was appointed earlier this year as extraordinary commissioner of the soccer federation to deal with the damage caused to Italy's lucrative world of soccer by match-fixing scandals.

A Telecom Italia spokesman did not immediately answer the phone.

On Monday, Tronchetti Provera unveiled plans to separate Telecom Italia's mobile and fixed-line assets, a move many observers read as a prelude to a sale of TIM as the executive sought to reinvent the company as a major player in the media sector.

Just two years earlier, Telecom Italia bought out minority investors in TIM in what was hailed as a strategy of convergence to bring all the company telecommunications operations under one roof.

The reorganization plan triggered a storm of criticism from politicians and union leaders.

Government ministers angrily suggested Tronchetti Provera was preparing to sell TIM to non-Italian investors. Telecom Italia unions announced a one-day strike at the end of this month to protest the organization and demanded the government block the restructuring.

Telecom said on Tuesday it had not received any offers for TIM.

A so-called "golden share" gives the government veto powers over corporate decisions over the former monopoly.

The EU on Wednesday said golden shares have no place in internal markets and said it would watch closely for any violations.

The spat turned into a furor on Wednesday when the office of Premier Minister Romano Prodi took the unusual step of publicly detailing private conversations over the past summer in which the prime minister and Tronchetti Provera discussed Telecom Italia's strategic plans.

The plans discussed in private appeared to run contrary to the strategic direction announced by Telecom Italia earlier in the week.
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