Telecom sector needs to be more open, competitive, and not viewed by governments as a tax target
Vittorio Colao, Vodafone CEO, used his keynote presentation at Mobile World Congress to tell regulators and governments to stop viewing the telecoms industry as simply a tax target.
“In Europe, the telecoms sector has not yet been identified as key to redesigning society after the economic crisis,” he said. “Our industry creates job and investment but we are viewed [by governments] as a mature industry and a tax target.”
Colao talked about 2010-15 as being a ‘seeding period’ to ensure future economic growth, but that would only be possible, he argued, if telecom markets – and content supply chains – were truly open and competitive. He questioned in particular the dominance of Google in the search and advertising sectors (70-80% market share) and that this should be looked at from a regulatory perspective
The Vodafone was also scathing about the lack of NGA (next generation access) openness in the fixed-line sector in some developed markets.
“After nearly 15 years of market liberalisation [in Europe], one player can typically account for around 60% of cash flow [in national NGA markets], which is not something we should be proud of,” he said. By contrast – Colao added – there are typically between three to six mobile operators in individual markets.
Colao proposed that the dominant NGA player should be forced to open up its network to at least three competitors, but not at a cost disadvantage to the host.
One of the upsides in Vodafone’s full-year financial results, announced last week, was its fixed-line business. Although it forms a small part of Vodafone’s revenue, fixed-line sales grew 23.4% during 2009 compared with the previous year.
In emerging markets, Colao called for more regulatory stability and the issue of spectrum in a timely and more transparent way. He also urged regulators and banking institutions to break down barriers to the adoption of mobile money transfers. “They are moving very slow,” said the Vodafone CEO.
Vodafone has used the MWC event to announce a number of initiatives targeted at emerging markets. These include low-cost Vodafone handsets (manufactured by TCL) supporting voice and SMS at an unsubsidised cost as low as $10.
Vodafone also announced Tuesday it is bringing M-PESA, one of the world’s most successful mobile money transfer services, to South Africa, to be deployed by its subsidiary, Vodacom South Africa and its South African banking partner.