Vodafone CEO Says Telecoms Sector Must Team Up, Hints at Deals
(Bloomberg) -- The chief executive officer of Vodafone Group Plc said the European telecommunications industry needs to work together more, suggesting the company could potentially co-invest in rival Virgin’s roll out of fibre and even merge with competitor Three.
“Returns on capital in this sector in Europe have halved over the past decade,” said Nick Read in an interview with The Times of London. “The sector is destroying value by duplicating infrastructure. We need to move to a better model.”
The executive, who took over running the telecoms giant in 2018, has struck collaboration deals across all of Vodafone’s territories including in the U.K.
In a sign even bigger ambitions are on the horizon, the executive said he is “supportive of consolidation on the right terms” and revealed he’s been lobbying regulators across Europe for sensible mergers and collaboration deals to help improve returns and encourage wide-scale investment in 5G and fibre.
Three, the U.K. mobile operator, is widely seen as being up for sale. While Read did not disclose if the two companies were in discussions, he explained why “Voda-Three” should be approved by regulators if it were to happen. In 2016, Three was blocked from joining forces with O2 on competition grounds.
“In Europe, we have more than 100 operators competing in a very fragmented way - as opposed to the U.S., which has three scale players,” he said. “China has three; India has three. And in those other markets, you have heavy investment but reasonable returns for shareholders.”
A spokesperson for Vodafone didn’t immediately respond to a request for comment.
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