BARCELONA Feb 28 The European Commission should
help telecom firms by cutting spectrum costs and allowing more
mergers to help offset the loss of revenue from the end of
roaming charges in Europe, Vodafone Chief Executive Vittorio
Colao said on Tuesday.
Speaking on the sidelines of the annual Mobile World
Congress, Colao said he had a good meeting with Andrus Ansip,
Europe's digital single market commissioner.
However, the Italian executive said the European regulator
was still underestimating how the present regulatory framework
hindered the capacity of telecoms firms to sustain investment as
revenue and profit declines.
"There continues to be a missing element in the debate: the
awareness of how much investment is needed and how low the
returns are," Colao told reporters in Barcelona. "We are
celebrating the death of roaming but nobody has figured out how
to replace revenues for telcos".
Colao said, for instance, leasing spectrum to operators for
a fixed period as is the case in Europe made no sense and
regulators should look to the United States where companies
acquire frequencies in perpetuity.
Telecom companies argue that the U.S. model means they can
make long-term investment decisions safe in the knowledge they
don't run the risk of losing the asset at some point in the
On net neutrality, Colao said Vodafone was in favour of a
balanced approach around "fair usage" of data to avoid market
dominance by telecoms companies while making the field
economically viable so they can keep investing.
"If net neutrality is strictly applied, there will be no
innovation", Colao said.
Net neutrality is the principle that internet service
providers should treat all data in the same way and not
discriminate between users or types of web content, or charge
different prices depending on the kind of traffic.
Vodafone's chief said Europe also needs to look at U.S.
policies in the area of consolidation and allow players
operating in the same market to combine and reduce costs.
"Big deals are getting done in the U.S. while in Europe
small deals are being blocked", said Colao, expressing
frustration that the sale of its operations in New Zealand to
Sky Network Television was blocked.
Colao said he was open to more deals, either to rationalise
Vodafone's assets and get out of certain countries, or to merge
with rivals to grow or expand into broadband services.
He said, however, that in practice getting all the stars
aligned remained difficult as the company first needed to agree
a deal with a third party and then get approval from regulators.
In India, Vodafone is in talks to merge its Indian
subsidiary with Idea Cellular to create the biggest
mobile firm in the country and fend off cut-throat competition
from new rival Reliance Jio Infocomm.
Colao said the talks were still progressing but there was no
certainty a deal would materialise.
In Europe, Vodafone said it was focusing on making its joint
venture with Liberty Global in the Netherlands a
success and would advise in the future whether it made sense to
broaden the alliance.
"Vodafone-Liberty Global is still an attractive combination,
especially if the EU wants the creation of a real Pan-European
player," Colao said.
(Editing by David Clarke)