French media group appoints two thirds of Italian incumbent’s directors, but CEO de Puyfontaine misses out on chairmanship.

Vivendi further extended its influence over Telecom Italia this week by appointing two-thirds of the telco’s board.

However, Vivendi’s CEO, Arnaud de Puyfontaine, missed out on becoming Telecom Italia’s new chairman, after the newly-elected board voted to re-appoint incumbent Giuseppe Recchi. The board also voted to retain Flavio Cattaneo’s services as CEO.

De Puyfontaine remains deputy chairman, and according to a statement issued by Telecom Italia on Friday, "has only deputy powers…without specific mandates."

Nevertheless, retaining Recchi as chairman will do little to loosen Vivendi’s tightening grip on Telecom Italia.

Shareholders meeting on Thursday voted in favour of a slate of 10 board candidates nominated by Vivendi. They also voted in favour of Vivendi’s proposal to reduce the number of board members to 15 from 17. The remaining five nominees were put forward by Assogestioni, an association of Italian asset management companies. It comes less than 18 months after Vivendi successfully lobbied to increase the size of Telecom Italia’s board to 17 from 13 in order to accommodate four Vivendi representatives, including de Puyfontaine.

This time round, the list of Vivendi-backed board members was led by de Puyfontaine, which as previously discussed, suggested that he was being put forward as Telecom Italia’s next chairman.

Vivendi’s chief financial officer, Hervé Philippe, and general counsel Frédéric Crépin, were also on Vivendi’s list, appearing ahead of Recchi; Cattaneo; and former CEO Franco Bernabe.

This week’s developments will do nothing to ease the tension between Vivendi and Italian telco regulator, L’Autorità per le Garanzie nelle Comunicazioni (AGCOM).

The watchdog in April ordered Vivendi to pare down its stake in either Telecom Italia, or Mediaset – the Italian media outfit in which Vivendi holds almost 29%. In order to safeguard media pluralism, competition law in Italy prevents single entities wielding influence in both telcos and media companies.

Vivendi plans to challenge AGCOM’s order, claiming that it does not exercise a dominant influence over Mediaset.

After this week, the same cannot necessarily be said of Telecom Italia.

In early April, it emerged that Vivendi had notified the European Commission that increasing its representation on Telecom Italia’s board would give it de facto control over the company.

According to the European Commission’s Website, Vivendi submitted commitments to the European Commission on Thursday in a bid to head off any antitrust concerns. The Commission is due to a issue a decision by the end of this month.

How this plays out between Vivendi, the Commission, and AGCOM could have a significant bearing on Vivendi’s ambition to build a southern European-focused media empire.

Speaking at Mobile World Congress this year, de Puyfontaine highlighted the closer alignment between media and telecom providers, and stressed the importance of producing premium content and forging strong partnerships with operators.

Telco partnerships "are an integral part of our content strategy," he said.

Based on how Italy is shaping up this year, this is a strategy that Vivendi will have to fight hard for.