Vodafone CEO touts openness, warns of Google's dominance

During the keynote address Tuesday at Mobile World Congress, Vodafone CEO Vittorio Colao touted his company's openness and warned about Google's dominance in the mobile search and advertising market.

Specifically, Colao said that Google and Yahoo control up to 80 per cent of the mobile search and advertising market and that the issue needs to be addressed "before it it is too late."

"I think its important the European Commission, and to some extent the Federal Communications Commission in America, should examine the whole value chain and ensure the rules they put in place really enable competition at all levels," he said. "The fact that 80 per cent of the advertising online goes down one funnel is something that should be looked at in the future debate on net neutrality. I want to be clear we use Google, we like Google. But it's more of a structural point--you can't develop a healthy data environment if you do not have healthy competition at all levels."

Later on Tuesday, Google CEO Eric Schmidt used his keynote at the trade show to reassure the wireless industry that the company was not interested in any kind of domination. He said that Google was not trying to reduce operators to "dumb pipes" and said the company valued its carrier partners.

"We feel very strongly that we depend on the successful business of operators globally," he said. "We need advanced, sophisticated networks."

During his keynote, Colao chastised Deutsche Telekom and Telefonica for not offering reasonable terms to Vodafone so that its customers could access their high-speed data networks. He called upon the European Commission to consider investigating before LTE networks are rolled out more extensively. 

Colao also waded into the net neutrality debate, and said consumers should be able to use applications as they see fit on the network--with an important caveat: he said operators should be able to charge extra for prioritizing a certain application or service. He said that this will likely lead to a tiered pricing model for data services. 

"We can't have the same network being used for business data traffic and song downloading at the same time for the same price," he said. "We will have to segment the network in many ways, it could be a 15- or 20-tier system."

Colao also touted his firm's "openness," saying that Vodafone is open to all operating systems and app stores. "We want to give customers a choice," he said, adding that the company has opened its billing systems to developers and content owners to let them monetize their work. "I think that Vodafone in terms of openness has done our part."

For more:
- see this FT article
- see this Daily Telegraph article
- see this Times Online article
- see this BBC article

Related articles:
Google CEO defends mobile strategy, touts Flash support
Voice down, but data up for Vodafone  
Pressure mounts on Vodafone to revamp business structure 
Vodafone achieve early hit with iPhone, Nexus One bombs

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