Vodafone's chief backs Europe over 02 takeover
Published 18/05/2016 | 02:30
The blocked takeover of O2 in Britain will prompt further jockeying among telecommunications companies there, Vodafone chief executive officer Vittorio Colao said.
Telecom companies are assessing options in the UK after the European Union rejected CK Hutchison Holdings's £10.25bn (€13bn) bid for a Vodafone competitor, Telefonica's O2.
But Mr Colao said EU Competition Commissioner Margrethe Vestager was right to block the O2 deal because it could have lessened competition and complicated network-sharing agreements like the one that Vodafone has with O2.
"Of course there will be moving parts in the system," Colao said on a conference call with analysts ay after reporting fourth-quarter results that beat analysts' estimates.
"My prediction is that there will be commercial alliances, possibly deals, but it's very hard to see who with whom.
"It's good to have consolidation but it should not come at the cost of lower competition," Colao said.
02's Irish ceo Ronan Dunne is understood to be lining up a possible management buyout of the business, that would see Telefonica exit the UK without further consolidation of the market.
Vodafone and other European telecom companies are scrambling to roll out so called quad play offers that bundle mobile, broadband, fixed-line telephony and television services. Vodafone and cable provider Liberty Global in February agreed to pool their businesses in the Netherlands.
With a two-year, £19bn investment completed, Vodafone is making progress with its "convergence" strategy, increasing the number of broadband and fixed-line customers, Colao said. The company will target capital investments in the mid-teens as a percentage of annual revenue, higher than it had previously forecast, to take advantage of opportunities to accelerate growth, it said.
The company reported quarterly revenue growth on its network in Europe for the first time since December 2010, as business improved in Italy and Germany.
Competition remains tough in the U.K., where fixed-line operator BT Group in January completed its acquisition of mobile carrier EE. (Bloomberg)