Telecom Italia’s stock was delisted from the Milan Stock Exchange on Monday, marking the culmination of a decades-long decline following its privatization in 1997. The move follows years of fluctuating ownership and a mounting debt burden that hampered modernization efforts, according to reports.
The privatization, initiated by the Prodi government, aimed to address Italy’s public debt and prepare the country for the Euro. At the time, Telecom Italia was the fourth-largest telecommunications company in Italy, with no net debt, approximately 30 international holdings, a real estate portfolio valued at over 10 billion euros, and a workforce of 120,345 employees. The sale of 35.26% of the company raised 26 trillion lire (roughly 14 billion euros). A consortium of banks and entrepreneurs, along with the Agnelli family, quickly gained control, though with a fragmented shareholding structure.
The initial privatization saw a group of banks acquire 6.6% of the shares, even as the Agnelli family secured only 0.6%, yet assumed a leading role. This fragmented ownership, characterized by internal disputes, is cited as a key factor in the company’s subsequent struggles.
Following the privatization, Telecom Italia experienced a period of aggressive expansion and debt accumulation. By 2022, the company had fallen to the 17th largest telecommunications firm globally, a significant drop from its 6th place ranking in 1997. Milena Gabanelli, writing for Dataroom – Corriere della Sera, noted that the increasing debt prevented necessary investment in network modernization, leaving 2.8 million Italian households without adequate connection.
Critics point to the privatization as a flawed process that prioritized short-term financial gains over long-term strategic investment. The company’s trajectory has been described as a “devastation” and a cautionary tale of financial interests overriding industrial needs. One analysis characterized the process as a “svendita” – a sell-off – that enriched shareholders while weakening the company.
The delisting follows a period of attempted acquisitions and restructuring. The future ownership and strategic direction of Telecom Italia remain uncertain, with the company now vulnerable to acquisition.
