Telecom Italia executive quits amid investigation

One of Telecom Italia’s most senior executives has quit suddenly amid the recent failure to win some large public-sector contracts and the opening of a probe into the possible violation of privacy laws.

Giuseppe Sala, director general in charge of large corporate clients, will stay on as a consultant, the company said, without giving any reason for the move.

Telecom Italia has recently lost out in two large tenders together worth more than €1bn ($1.27bn). One worth about €600m is for the provision of data services to central government departments around the country. The other, worth about the same amount, covers supply of voice telephony for central, regional and other government bodies.

Both went to Fastweb, Telecom Italia’s fast-growing competitor in the broadband area.

Telecom Italia did announce this week that it had won a four-year contract worth more than €200m to build a network for Poste Italiane, the country’s postal service.

Mr Sala’s departure comes as competition hots up in Italy and as the company projects slowing revenue growth and flat margins. In March the company said the highly liberalised market had “resulted in a further reduction in prices to the benefit of end users”. Regulators had recently imposed a higher-than-expected cut in connection fees that Telecom Italia could charge from mobile telephones.

Regulators also this week have opened a preliminary investigation into possible breaches of privacy laws at Telecom Italia amid suggestions that the company has been misusing personal data.

Italy’s privacy regulator said it would be looking at the management of telephone lists, the provision of unrequested services and the management of databases.

Telecom Italia has denied any wrongdoing in the keeping of files and threatened legal action against Italy’s La Repubblica newspaper for its reporting of the story.

The use of telephone taps and other intrusions into privacy has been in the spotlight for months in Italy, most recently in revelations stemming from calls made in the country’s growing football scandal. The biggest revelations in last year’s banking scandals emerged in leaked telephone transcripts involving Antonio Fazio, the longstanding governor of the Bank of Italy who later quit.

Newspapers have come under pressure from politicians not to publish transcripts of conversations taped on magistrates’ orders.