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Vodafone's outgoing CEO: 'techlash' should be seen as an opportunity for telcos

Vodafone Group PLC's outgoing CEO, Vittorio Colao, said the recent regulatory backlash against technology companies, or so-called "techlash," would serve as an "opportunity" for mobile operators as calls grow for more scrutiny of the big tech and social media giants.

Speaking during a May 15 earnings call, Colao, who will stand down from his role at the British operator later this year, said telecom players would benefit from tech companies' blunders in privacy and security.

"[Privacy and security] are the two things that, historically, Vodafone and all telcos have been good at," Colao told analysts.

In contrast, guaranteeing data privacy would remain "intrinsically difficult" for over-the-top or internet-based businesses, "no matter how much they adjust" their models, he added.

In the aftermath of Facebook Inc.'s data privacy scandal, rampant levels of fraud in digital advertising and mounting pressure to address the issue of fake news, regulators are accelerating efforts to curb the abuses of the tech industry.

Germany has already imposed anti-hate speech laws, while new privacy controls — known as the General Data Protection Regulation, or GDPR — will come into effect across the EU on May 25.

Colao said the backlash does present a "potential advertising opportunity" for mobile operators.

"We have [the means] to sell [user] data in a healthier way," he said.

Vodafone announced a 15.4% increase in group operating profit to €4.30 billion for the year ended March 31, compared to €3.73 billion in the prior year, despite a 2.2% fall in revenue to €46.57 billion. Group adjusted EBITDA was up 4.2% at €14.74 billion.

The company also confirmed that, on Oct. 1, CFO Nick Read will assume the role of CEO, replacing Colao. Margherita Della Valle, who has been deputy CFO since 2015, will assume the role of CFO and become a member of the board.

Colao reflected on his time as CEO. He noted that the company, which recently agreed to acquire Liberty Global PLC's cable assets in four European countries and last year announced an Indian merger with Idea Cellular Ltd, has undergone a wave of M&A transformations during his 10-year tenure, resulting investments totaling over €150 billion across CapEx, spectrum and acquisitions; more than €115 billion in divestments; and over €120 billion delivered to shareholders.

"We have transformed the company into a different beast," Colao concluded.