Telecom Italia's Bernabe: Nokia, Vodafone deals are 'not what Europe needs'

BRUSSELS--Europe has been falling behind in mobile innovation, as illustrated by its low LTE penetration compared to the US, and recent events such as Microsoft's acquisition of Nokia's devices business and Vodafone's sale of its stake in Verizon Wireless will not help the region reverse this situation, according to Telecom Italia CEO Franco Bernabe.


Bernabe, who is also the current chairman of the GSMA, was speaking during a keynote session at a GSMA event in Brussels on Thursday.

"What we have seen in last few days is not what Europe needs," said Bernabe. "Cross-border investment is very welcome…but despite the fact that I think Microsoft will do a fantastic job…what happened to Nokia does not go in the direction of helping Europe to become a champion."

Bernabe was also critical of the impact on the industry of Vodafone's massive $130 billion transaction to sell its 45 per cent stake in Verizon Wireless to Verizon: "I am also not sure this goes towards making the European industry grow more," he said. "We need to consider that Europe has been at the centre of mobile technology development and is now it is losing ground. We cannot think this is the future for Europe."

His comments were echoed by Anne Bouverot, director general of the GSMA, who said it's hard to understand how Europe had got itself into a position where it no longer had its own device manufacturer.

"What did we do in Europe [to come to this] situation?" she asked. "We only seem to see movement going in one way," toward the United States or Asia.

As an example of Europe's lost leadership in mobile innovation, Bernabe and Bouverot both cited that fact that LTE penetration will only be around 2 per cent in Europe by the end of this year, compared to 20 per cent in the U.S. market.

Neelie Kroes, the European Union's digital commissioner and telecoms chief, was more circumspect about the Nokia and Vodafone deals during her keynote session, saying merely that the Vodafone deal had raised a lot of money and created a lot of opportunities.

On Nokia, she said: "Don't ask me if I am pleased or not," but added that she had great respect for Nokia's board for having the courage to make such a decision.

"I always admire people who dare to take decisions…that is not asking for a lot of flowers but is just keeping the company in shape so it can survive," she said.

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