VODAFONE chief executive Vittorio Colao yesterday said pressure from regulators could strangle investment in the mobile industry and leave Europe floundering behind the US.
He said radical reform of the “auto-pilot” regulation facing European operators could be the difference between the industry returning to growth or starting a downward spiral that could see Europe become a second-rate mobile environment.
He pointed to areas such as the complicated auction processes for mobile spectrum – “the lifeblood of this industry” – in which the radio waves on which mobile signals are carried are split up “in 600 different ways”. He was also scathing of the decision to slash mobile termination rates (MTRs) – the fee applied for connecting to a rival network – saying the benefit to consumers in negligible but the impact on operators severe.
He said: “[Regulators] should focus more on the long-term future of the industry. The question is do you want employment and investment or are you only interested in price?
“The UK risks falling behind in mobile investment. If regulation was relaxed we would definitely invest more. Without a doubt.
“We are looking now at either a ‘heaven’ scenario or a negative one. If it is heaven, we can stop the decline in revenues and start to grow again. We can offer the same sort of service in Europe as we see in the US.
“The worst scenario is we continue to be regulated and lose £300m or £500m and we’re forced to strip investment to a minimum.”
Colao said there is a wider argument for encouraging growth in the telecoms industry, with economies seeing a disproportionate rise in growth for every pound invested in telecoms.
The chief executive of the world’s largest mobile network by revenue said his attitude towards so-called “over the top” players – companies such as Skype that use mobile networks to run competing communications services – has softened as more competition has entered the market.
He said over the top players drive data usage, which now accounts for 15 per cent of Vodafone’s revenues, but added they must add value to the mobile environment if they expect to benefit from operators’ investment in infrastructure.
Vodafone boss Vittorio Colao hit out at “auto-pilot” regulation