Telecom Italia CEO Amos Genish (pictured) highlighted price competition, regulation and diminishing profits as contributing to a failing European telecoms market, but believes there is hope for a turnaround with the launch of 5G.
Speaking to Financial Times (FT), Genish urged the need for change in the European telecoms market, which the newspaper said is one of the worst performing sectors for investors.
Genish said the industry “cannot ignore this market failure”, as operators are “running out of steam financially and shareholders are voting with their feet”.
For Telecom Italia, some of the problems Genish described are very much close to home, particularly with regards to shareholders. He has overseen a battle in the boardroom between Vivendi, the Italian operator’s single largest shareholder and activist investor Elliot Management, which took control of the board in May.
The power struggle resulted in doubt over Genish’s future at the company, but he has so far held on to the position. The uncertainty also had an effect on the operator’s share price, which has fallen 40 per cent since May.
He reiterated the war in the boardroom was “counterproductive and not helpful when we, like all other telcos in Europe, are facing critical challenges”.
The CEO noted 5G could be a potential saving grace, both for Telecom Italia and the sector as a whole.
Earlier this month, the company splashed €2.5 billion on spectrum, a similar amount to rival Vodafone Italy, generating a total much higher (€6.5 billion) than the reserve price set by the country’s regulator.
Genish recently defended the cost, stating 5G will be the most important catalyst the industry has seen in the last 20 years, sentiments he echoed in the FT interview.
He said the auction was designed to enhance revenues for the government, and while the high prices were “painful” and “unexpected”, the company had no other option but to pay up.
“As market leader, we could not afford to be out of this game…we need 5G to move from a bleeding sector to a winning sector,” he said.Subscribe to our daily newsletter Back