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Mobile World Congress: Vodafone CEO calls for tougher regulation of tech giants

The CEO of British mobile giant Vodafone Group Plc urged telecom regulators to level the playing field between mobile operators and global tech companies such as Facebook Inc., Alphabet Inc., Amazon.com Inc., Microsoft Corp. and Apple Inc.

More lightly regulated internet platforms such as Facebook and Instagram are "the biggest telcos in the world" due to their reach, Vodafone CEO Vittorio Colao said during a Feb. 26 keynote at the annual Mobile World Congress.

However, tech companies have far fewer obligations, particularly around customer data, Colao said in Barcelona.

European telecom players, including cable giant Liberty Global plc and France's Orange SA, have long complained about levels of regulation within the sector. With tech groups increasingly launching rival communications services, such as free messaging, voice and social media services, on the back of telecoms groups' infrastructure, telco industry leaders are becoming more vocal.

"We cannot be asked to invest if we have different rules from the others," Colao said.

Digital disruptors have cost European operators as much as €100 million in profit every day for the past decade, according to a 2017 report by Accenture Strategy on behalf of the European Telecommunications Network Operators' Association.

Without more regulatory controls, Colao added there is a risk of tech companies becoming too "big and powerful."

Technology was the largest sector in terms of market cap in 2017, according to PricewaterhouseCoopers research. Of the top 100 companies globally, tech accounted for $3.582 trillion, compared with $859 billion for telecommunications.

While competing with internet companies has thus far been vital for telcos to stay relevant, regulatory and pricing pressure has forced them to look to adjacent areas such as OTT, mobile video and smart home applications for new sources of revenue and better margins.

With European telcos already stretching their investment capacity, however, this has delivered mixed results. Investing in content is proving costly for operators in a market dominated by Netflix Inc. and Amazon, while obstacles to network investment risk slowing down developments in the internet of things.

Colao said: "The returns of the industry are not good enough today ... we need a level playing that allows both investment and competition at the same time."