How can Vivendi have this much influence over TIM without owning it?

Following the removal of Flavio Cattaneo as CEO, the telco has appointed Arnaud Roy de Puyfontaine, the current Vivendi CEO, as interim boss.

The last couple of months have seen Vivendi wrestle more control of the telco without increasing its stake, which currently stands at 24.9%, just below the levels required to initiate a takeover. The board is already filled with Vivendi friendlies, and some might have assumed Cattaneo was a puppet appointment with de Puyfontaine pulling the strings. Now it would appear Vivendi has given up with smoke screens and misdirection, as its own CEO has been appointed as temporary boss.

“With reference to Mr Cattaneo’s resigning from the office of CEO and Board member, consistently with TIM’s succession plan the Board of Directors temporarily granted his powers to the Executive Chairman Mr. de Puyfontaine, who with the aid of the Company’s management team, will lead the Group along the lines of the strategic plan,” TIM said in a statement. “The powers referring to the Security Department and the subsidiary Telecom Italia Sparkle have been temporarily assigned to the Deputy Chair, Giuseppe Recchi.”

Speculation on where the ‘strategic plan’ arose from could lead to some conspiracy theories, a couple of which might lead back to de Puyfontaine. It certainly wasn’t the brain child of Cattaneo, who reportedly left the group to protect his reputation after disagreeing with the strategy, but at least there is some attempt to disguise the conspiracy theory by calling it a ‘Group’ strategic plan. This was it sounds like it came from TIM itself.

Such saga’s are proof of how self-destructive the telco industry can be, and how illogical European regulators can be. Vivendi is seemingly doing what every capitalist organization would; it would appear to be trying to influence the strategy of another telco to benefit itself, without having to fork out the cash to control the entire group. It’s a win-win for Vivendi should it turn out to be a correct theory, but surely regulators should be paying closer attention to this. They seem to be happy to meddle in competition matters all over the place but this is overlooked. Seems odd.

In terms of the financials, TIM has actually had quite a successful first half to 2017. Group revenues stood at €9.772 billion, a year-on-year increase of 7.4%. The core domestic business grew 3.4% to €6.965 billion, while the Brazilian business increased a very impressive 23.4% to €2.293 billion.

Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.