MWC: Vodafone offers to join forces with rivals


On Monday at Mobile World Congress, mobile operator Vodafone offered to join forces with rival firms to share the $40 billion bill to build out new superfast fiber networks in Europe, in a sign of the increasing demands being placed on operators.

Chief executive Vittorio Colao said he had approached rivals in Germany, Spain and Italy to consider co-investing in new networks to meet the insatiable demand for faster speeds at a time when consumers are not willing to pay a huge premium.

"So far, we have not succeeded in convincing them that this is a good idea but we are keen on doing it," Colao said on Monday at the Mobile World Congress in Barcelona. "If times are tough and there is not enough money, we should probably go into a co-investment situation and have open co-invested infrastructure."

European operators such as Vodafone (London) and Telecom Italia (Turin, Italy) used the first day of the annual industry gathering to warn regulators that they would struggle to invest in networks if they did not see some reduction in the regulatory burden being placed on their business models.

At the heart of the problem is the continued reduction in so called mobile termination rates, a fee operators charge each other to connect calls, which has been slowly eroded by the European Commission.

Fees for making calls when abroad are also coming down while operators are having to bid aggressively in spectrum auctions to meet the demand from consumers for fast networks to support video and gaming on smartphones, laptops and tablets.

Using Britain as an example, Colao said earning margins for the operators were around 18-24%.

"Take out investment, take out taxes and a bit of working capital and there is not much left. With 200%growth in traffic from smartphones, sooner or later we will hit an investment issue. Is the market profitable enough to continue to reinvest?"

Many of Europe's largest operators have launched mobile network sharing deals in recent years but Colao said the suggestion of sharing the build-out of a fixed network appeared to be a step too far for his rivals.

The European Commission and individual governments are keen for operators to build out faster networks as they believe it can boost economic productivity.

Colao said he estimated the European industry would need to spend around $40.3 billion to build out new LTE networks to give operators the opportunity to charge higher prices for consumers.

Such co-investment deals have already been put in place in France. In Italy and Spain, however, the incumbents are for now focusing on paying down debt.

Vodafone mostly takes fixed-line products in Italy and Spain from the incumbents on a wholesale basis.


Featured Big Data Reports

Market Opportunity: Big Data in the Internet of Things
Big Data and Analytics software and applications will play a crucial role in making IoT a success. The data generated through sensors embedded in various things/objects will generate massive amounts of unstructured (big) data on real-time basis that holds the promise for intelligence and insights for dramatically improved decision processes.


Structured and Unstructured (Big) Data in Telecom Analytics
This report provides the reader with a broad understanding of telecom data (structured and unstructured/big data) and related analytics. The report identifies market drivers and opportunities as well as forecasts for certain key growth areas such as deep packet inspection.


Telecom Carrier Big Data Operations, Applications, and Services
Telcos have a major advantage in that they have many sources of data but if they want to monetize that data and derive meaningful, actionable analytics it could be challenging due to the complexities of correlation, prediction, and the massive volumes of data from different sources.


Affordable Market Reports on Big Data, IoT, CDN & More!
Access the exclusive new series of market research reports brought to you through the partnership of Mind Commerce research and
Browse the latest titles




Featured Events & Partners

The Telecom Exchange (TEX)
Wednesday, June 24, 2015

Cipriani Wall Street, New York City

Designed to navigate enterprise and carrier network operators through all carrier hotels and colocation houses available in the US and globally.

Visit event website...