While Italy still has a fully functioning government, the same cannot be said of one of the country's biggest companies.
While prime minister Enrico Letta survived a confidence vote on Wednesday, Franco Bernabé, Telecom Italia's CEO, stepped down from his position on Thursday. The news leaves Italy's incumbent telco, which has to make several key choices on strategy in the months ahead, in limbo.
Bernabé's successor has not been appointed and until a replacement is found, the company likely won't decide over the two most pressing issues about its future: the possible sale of its Brazilian division Tim Partipacoes and the spinoff of its fixed-line network.
Both moves, which have been considered as ways to cut the company's €29bn debt and avoid a rating downgrade, have reportedly caused friction between the former executive and Telefonica, which recently won control of Telco, the holding company which owns 22.4 percent of Telecom Italia.
According to reports, Massimo Sarmi, current CEO of Poste Italiane, Italy's postal service, could be Bernabé's successor. Others point to Vito Gamberale, CEO of F2i Fund, who held various executive positions in Telecom Italia in the 1990s as a successor. In the meantime, current COO Marco Patuano has been nominated as interim head of the company. Telecom Italia's stock rose by 1.6 percent on Thursday following news of the chagnes.
Bernabé's departure became a concrete possibility after the recent deal through which Telefonica agreed to buy out its partners' stake in Telco, a development he is said to have heard about via reports in the media.
That reportedly left the executive with no backing from Telecom Italia's biggest stakeholder, since in the past the CEO and the Spanish company had frequently disagreed over strategies. For example, when Telecom Italia's board gave Bernabé the green light to spin-off its fixed-line network, Telefonica did not participate in the vote and was rumoured to be against the decision.
Last month, the former Telecom Italia's executive told a parliamentary hearing that the sale of Tim Partipacoes, Brazil's second largest wireless carrier, would "lower the company's international status and hurt its growth prospects". Telefonica, meanwhile, may support the sale, as such a move could potentially solve the antitrust issues it is facing in Latin America where it owns several businesses.
Bernabé will receive €6.6m in compensation after his exit. He did not address the press after leaving the board meeting this week but expressed his feelings in a letter to employees, in which he expressed regret for the "insufficient attention given" to a company that is a "collective asset" for the country.
Bernabé spoke in a similar fashion on Monday in a letter to the presidents of two parliamentary committees, writing that his plan for a fixed-line spinoff "for a long time hasn't received the political support that it needed". He nonetheless pushed for a quicker implementation of the plan which, he said, would give Telecom Italia more flexibility around the "necessity of a capital increase".
It will now be up to Enrico Letta, who appears stronger after Wednesday's vote, to determine the future of the company's fixed line business — its main asset, which is considered by many in Italy a strategic priority for both Telecom Italia and the country.