Gov’t set to test Vivendi’s grip on Telecom Italia

Italian government officials are reportedly moving forwards with the process of determining whether Vivendi exercises a controlling influence over Telecom Italia (TIM).

The moves represent a further ratcheting up of pressure on the French media group, which has resolutely rejected claims that it now “controls” TIM.

According to Italian press reports, the government could determine by the middle of next month that Vivendi has failed to provide proper notification that it controls TIM, leading to a it potentially levying a penalty of up to 1% of the cumulative turnover of TIM and Vivendi together.

Italian officials are also likely to consider whether to trigger the Golden Power that allows the government to intervene in cases where its strategic interests are threatened.

The officials have reportedly been looking closely at whether uncertainty about the future of Sparkle, the TIM subsidiary that manages fibre-optic backbone cables could justify intervention.

Earlier this month, Vivendi told Italian markets regulator CONSOB that “all empirical data” available proved that “Vivendi is not in a position to control Telecom Italia ordinary shareholders’ meetings”.

TIM itself said that the pair’s “coordination activity” centred on strengthening the TIM management team with a senior executive from Vivendi to achieve greater coordination “between the industrial and commercial activities of the different companies, in the context of the existing strategic plan”, and the creation of a new joint-venture between TIM and Vivendi’s pay TV unit Canal+.

Vivendi has also made representations to the government that it does not exercise control over the telco.

Its attempts to assuage Italian concerns have been complicated by the French government’s decision to nationalise STX France, the St Nazaire naval shipyard that was acquired by Italy’s Fincanitieri earlier this year.

French president Emmanuel Macron and Italian Prime Minister Paolo Gentiloni are scheduled to have a bilateral meeting on September 27 that will likely include discussion of the St Nazaire case.