Telecom Italia reportedly denied it would cut 15,000 jobs in response to increased competition in fibre from state-backed Enel, as new CEO Flavio Cattaneo prepares to address issues at home and abroad.
Cattaneo took the reins last month and is expected to place the company’s strategy in Brazil, where it owns TIM Participacoes, the country’s second largest operator, high on the priority list.
The unit reportedly caused particular discord between former CEO Marco Patuano and the operator’s top shareholder Vivendi, which favours an exit from the country.
But Telecom Italia is also facing intensified competition at home, which will draw the new CEO’s attention.
Power utility firm Enel, which said last month it will invest €2.5 billion in building a national high speed fibre network, has thrown up an immediate challenge.
The network will be open to all operators in Italy, potentially cutting in to Telecom Italia’s business, and has also received vocal backing from Prime Minister Matteo Renzi, who has reportedly grown tired of slow progress at the incumbent.
Bloomberg reported Enel’s plans could lead to job cuts of almost 30 per cent of Telecom Italia’s workforce, and put it at risk of losing almost five million wholesale clients.
Enel’s chief executive Francesco Starace reiterated this week the company is open to Telecom Italia being involved in the project, reports Reuters, although Cattaneo and Vivendi’s strategy remains unclear.
Telecom Italia has so far chosen to pursue its own plans to develop a high speed network in the country.