Telecom Italia CEO says network solid

Telecom Italia’s (TIM) network can cope with the surge in traffic driven by the coronavirus crisis, CEO Luigi Gubitosi was quoted as saying on Wednesday, as US activist hedge fund Elliott Management cut its stake in the group.

The strategic role of TIM’s telecoms network – as well as the need for an upgrade – has taken center stage in the healthcare emergency, which has confined Italians to their homes and forced millions to embrace remote working and online learning.

“TIM’s network is wellbuilt. It is very solid and stable and can hold additional traffic with no problems,” Gubitosi told the Corriere della Sera newspaper.

His comments follow a decision by Elliott to reduce its TIM stake to 6.97 percent from 9.72 percent.

A person familiar with the matter, who asked not to be named, cited a “portfolio rebalancing” given the market situation.

Paul Singer’s Elliott hedge fund, with assets under management of about $40.2 billion at December 31, has been increasingly active in Europe, taking stakes in some of the region’s largest companies, including SAP, Bayer and Altran in the past year.

Investors face heavy losses as the coronavirus outbreak devastates financial markets, driving the pan-European STOXX 600 index down by a quarter in the year to date.

Gubitosi said that the coronavirus lockdown measures imposed by Italy’s government had nearly doubled traffic on landlines while traffic on mobile lines had risen by 30 percent.