At the end of his frontal with the Government Tronchetti Provera was in an impasse

At the end of a week of tensions and polemics with Romano Prodi, Marco Tronchetti Provera, President of Telecom Italia's Government, delivered Friday, his resignation. At his request, the lawyer Guido Rossi, seventy-five years, which had already been selected by Romano Prodi for the privatization of Telecom Italia in 1997 and that has been recently given the investigation into corruption in Italian football takes over the reins of the fourth European telecoms operator.

Officially, the withdrawal of Marco Tronchetti Provera, which remains the first shareholder of the Group (through its 60 of Olimpia, owns 18 of Telecom Italia), is motivated by "the intention to safeguard the interest of the Group and its shareholders and to maintain management in line with the strategy decided by the Council. Clear, the President of Pirelli preferred is to indent by choosing close to the centre-left "qualified" personality, without abandoning its plan of reorganisation of the Group announced eight days ago.

"At the end of his frontal with the Government, Tronchetti Provera was in an impasse." "The choice of Guido Rossi is a way to unblock the situation by offering a new interlocutor to power," says a shareholder in the group. Officially, the pattern of Pirelli has not yet announced sale of its mobile branch TIM, but it flows logically from its reorganization plan.

Although that approved unanimously by the Council of Telecom Italia, project of splitting the group into three entities (fixed, mobile and content network) for its transformation into a "media company" concern to the Government a form of dismantling and the transfer medium term TIM to a foreign operator (Telefonica, Deutsche Telekom or Telecom France).

Two years after having initiated the merger of its mobile branch the principle of convergence, the operator has justified its strategic turnaround by willingness to turn content on BT model platform, multiplying the agreements with the providers. But most analysts see it as a "package" to push through the sale of TIM, the only way to virtually erase debt (EUR 41.3 billion at June 30, 2006) operator, become unbearable for a group including fellow course has been divided by two in five years (at 2.30 euros per share).

Redemption of AOL Germany

The announcement of this volte-face visibly provoked the wrath of Romano Prodi, who unprecedented for a privatised company even publicly revealed the contents of his discussions with Marco Tronchetti Provera on its ongoing negotiations with General Electric (GEC) and Time Warner in the area of content. While defending himself of any interventionist intent, the Minister of economic development, Pierluigi Bersani, said he was favourable to a greater transparency in the control of Telecom Italia. Meanwhile, Guido Rossi is willing to commit "calmly" to the reorganization of the Group and the new industrial plan launched by Marco Tronchetti Provera. It remains to know if his appointment will be sufficient to allay the fears of the Government.

Sign of its willingness to pursue its policy of acquisitions in the field of broadband: yesterday evening, Telecom Italia announced the resumption of the Internet of AOL in Germany access subsidiary for 675 million euros (3.2 million subscribers). Other candidates for the redemption of the access provider, offered for sale by Time Warner at the same time as AOL France, included the Dutch group Versatel and Freenet.