Vodafone CEO: Europe Needs Uniform 5G Rules

Vittorio Colao says 5G 'will not work' in Europe without action on the standardization and regulatory fronts.

Iain Morris, International Editor

February 22, 2016

4 Min Read
Vodafone CEO: Europe Needs Uniform 5G Rules

BARCELONA -- Mobile World Congress 2016 -- Vodafone CEO Vittorio Colao has issued a stark warning that 5G services will be a disappointment in Europe unless standards meet local needs and without uniform telecom regulations from one country to the next.

"I would be very focused on making sure the standards are designed in the interests of European operators and on making sure the release of spectrum and the rules around access, privacy net neutrality and so on are the same across Europe," he said in response to questions from Light Reading during a meeting with reporters at this week's Mobile World Congress in Barcelona.

"If you want to have IoT, connected cars and so on then you had better make sure the standards and the rules are the same or there is a risk China or the US -- which are big markets -- will leapfrog," he went on. "If you have different rules for connected cars in Spain and Portugal the thing will not work."

The comments followed a conference session at the event in which Colao had a customary telco dig at regulatory authorities over the investments that will be needed for higher-speed services in future.

Speaking to reporters, the Vodafone Group plc (NYSE: VOD) boss urged authorities to look at the return on capital among operators rather than the amounts they make, especially in light of planned spending on fiber, security, 4G enhancements and other technologies that 5G will need as a foundation.

Regulatory measures continue to exert pressure on pricing and takeover activity -- while often opposed in European markets -- has not led to improvements, argued Colao.

"There is a myth that prices go up with consolidation but on a price-per-gigabyte basis they have gone down," he complained. "If you want to build a hyper-connected gigabit society, the investments will be massive."

Colao revealed that Vodafone is working on 5G technologies at facilities in the UK and Germany and is eager to work with a variety of other organizations on the development of standards.

That could even include Facebook . Earlier today the social media giant announced an initiative called the Telecom Infra Project through which it is looking to collaborate with equipment vendors and operators on the development of new network technologies like 5G.

"We welcome Facebook and everyone to discuss the future of these things," said Colao in response to questions about Facebook's move, pointing out that he was unaware of the full details of the Facebook proposal.

For all the latest news from the wireless networking and services sector, check out our dedicated Mobile content channel here on Light Reading.

While a number of operators have recently announced plans to launch or conduct trials of 5G services in the next few years, Colao insisted the actual technology was still four or five years away.

He also noted the potential of virtualization technologies as a driver of merger activity in Europe, but said the cost savings would probably not be sufficient to spur "macro" consolidation involving the very biggest players.

"Virtualization will lead to lower costs and quicker time to market but you are talking about a relatively small percentage of value compared to what you have to pay to acquire someone else," he told Light Reading. "Mergers are probably more likely. Can I see some mergers in Europe? I can. But big aggressive acquisition is less likely."

Colao refused to comment specifically on Vodafone's future plans around mergers and acquisitions but told reporters there was a need for consolidation in the vast Indian market, where he believes there are too many "sub-scale" players.

Vodafone recently announced a joint venture with cable operator Liberty Global Inc. (Nasdaq: LBTY) in the Netherlands after talks about an exchange of European assets fell through last year. A number of financial analysts are still hoping that Vodafone and Liberty will announce a tie-up in other European markets. (See Vodafone, Liberty Global Form Dutch JV and Vodafone, Liberty Call Off Asset-Swap Talks.)

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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