Vivendi in quandary about Telecom Italia control
Vivendi ‘wants convergence at TIM’ but ‘does not control’ company, it says in half-year report
Vivendi says it wants to promote a strategy of convergence at Telecom Italia, at the same time as claiming it does not exercise control over the company.
The contradictory statements appear in consecutive paragraphs in last night’s half-year results from the French media group, which is the largest shareholder in Telecom Italia, with a 24% stake.
This year Vivendi has put its CEO, Arnaud de Puyfontaine, to chair the board of Telecom Italia, which operates as TIM in Italy and Brazil and as Sparkle in the wholesale carrier market. It appointed its chief convergence officer, Amos Genish, as head of operations at TIM, and previous CEO Flavio Cattaneo resigned. Previous chairman Giuseppe Recchi was demoted to deputy chairman.
Vivendi said in its half-year results that “as the largest shareholder of the Italian operator, [it] intends to promote a long-term strategy of developing the convergence between telecommunications and content.”
But in the next paragraph of the report it said that “it considers that it does not exercise any de facto control of Telecom Italia”, that “Vivendi’s interest in Telecom Italia is not sufficient to allow it to exercise, on a stable basis, a dominant influence at Telecom Italia shareholders’ meetings” and that “Vivendi is not in a position to control Telecom Italia ordinary shareholders’ meetings”.
It added: “Vivendi confirms that, at present, it does not have the power to govern Telecom Italia’s financial and operating policies.”
Meanwhile speculation continues about the future of both Sparkle and the TIM infrastructure in Italy. The Italian government is believed to oppose foreign control of both.
This morning Francesco Starace, CEO of utility company Enel, said the group was not interested in merging its fibre business, Open Fiber, with TIM’s to create a single network company.
Reuters reported that Starace made the comment at a business forum. He said, according to the new agency, “we are not interested in talking about” a single network company. ““We are very busy connecting Italy and that is the mission of Open Fiber.”
Open Fiber is backed by Enel and state controlled Cassa Depositi e Prestiti.
Meanwhile an executive at Sparkle did not wish to comment on or off the record about the future of the wholesale carrier, adding: “It’s all speculation.”
Earlier in the week the newspapers Corriere della Sera, Il Sole 24 Ore and La Repubblica all reported government concerns about Vivendi controlling strategic assets, and saying officials regard Sparkle as strategic. La Repubblica said the government could force Vivendi to sell Sparkle and TIM’s security solutions and services unit Telsy Elettronica e Telecomunicazioni. The situation “changes every day”, said an executive close to the business.