Telecom Italia CEO targets debt reduction

Telecom Italia's new CEO outlined a three-year business plan that calls for investing €15 billion/US$22.98 billion to help the company exploit the industry's trend toward mobile and fixed line convergence, while reducing debts and compensating shareholders, an Associated Press report said.

The business plan is the first by the new management, which was put in place last November, a month after Spain's Telefónica and a group of Italian banks took over Italy's largest telecoms company.
It calls for revenue growth of 1% to 2% a year to 2010.

The Associated Press report also quoted CEO Franco Bernabe as saying that he was constrained by the company's debt of €35.7 billion/US$55 billion, from making exciting announcements such as expansion and sees little room for selling other assets.

'Don't expect from us fireworks, don't expect from us bizarre strategies,' Bernabe said. 'I think we are very realistic, we know what needs to be done and we need some time to do it, because the company is big and the problems are many.'

The core of the plan, debt reduction, will be through financial discipline, Bernabe added.

Telecom Italia also has cut its dividend by nearly a half to €0.08/US$0.12, which Bernabe said was more in line with industry standards.