Vodafone CEO threatens legal action over fair access to fibre networks

Vodafone CEO Vittorio Colao will highlight his concerns with European Union officials this week that former state-run monopoly telcos may exert too much control over new high-speed fibre networks being rolled out across Europe.

This move by Colao underlines his worry that Vodafone's future strategy of bundling wireless, TV and broadband services could be threatened if the former state telcos impose high charges for access to their new fibre networks.

"The European former [telco] monopolies still control 60 to 70 per cent of the fixed market," Colao told the Financial Times. "They believe that this is the great opportunity to remonopolise the market."

"It would be a bit disappointing to create competition in the telecoms sector over the past 15 years to then give up to remonopolisation," he added.

Colao says that he will inform Neelie Kroes, European Commissioner for Digital Agenda, that Vodafone will take legal action against any slide toward remonopolisation of the telecom sector.

Kroes' recent proposal allowing operators to deploy new fibre networks across Europe with the freedom to set charges is in sharp contrast to the tight pricing regulation of current fixed networks.

The larger incumbent operators have argued for more flexible pricing after warning the EU that the required investments in new fibre networks could not be justified without the guarantee that returns would not be throttled by regulated pricing, according to the FT.

While Colao said he supports the EU's initiative, he noted that any interpretation of these rules that results in reduced margins or restricting competitive access by the new networks would be injurious to the market.

If high charging or restrictions are imposed, then Colao told the FT: "I can tell you that Vodafone is going to make many, many lawyers very rich and the European Commission will be incredibly busy in coming years."

For more:
- see this Financial Times article (sub. req.)

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