The Italian government has notified Telecom Italia (TIM) that Prime Minister Paolo Gentiloni signed a decree activating the so-called “golden power” rule of 2012 that allows the state to intervene in strategically important companies. The government’s unprecedented move to apply special powers comes after Italian markets watchdog Consob ruled that France’s Vivendi had “de facto control” of TIM via a 24 percent stake and two-thirds of the company’s board, a view both companies deny.
In a statement, TIM acknowledged it had received the government’s decision, which demands that all matters relating to national security at the company, including international wholesale unit Sparkle and security-focused ICT subsidiary Telsy, must be handled by “a member of the Board of Directors [of each company] who is an Italian citizen, who has security clearance, and is approved by the government for the role.” The government ultimately stopped short of specifically demanding that TIM place the units into separate entities.
The government also informed TIM that it would take steps to appoint the head of a special security unit which will be involved “in all decision-making processes pertaining to strategic activities and the network”, said TIM, adding that the official in question will be chosen from a shortlist of three names proposed by the Department of Information Security of the Presidency of the Council of Ministers.
TIM’s international wholesale unit Sparkle is considered a particularly sensitive asset because of its 560,000 km of undersea cables connecting to countries in Europe, the Mediterranean and the Americas, while Telsy provides encrypted communications systems and software to customers such as the Italian army and government.
The operator, which has a 90-day term to comply with the requirements, added that part of the government’s demands have already been implemented by its existing organisational and governance structure. It will also be required to submit a report stating the measures it has adopted in order to comply with the various requirements on a half-yearly basis.
