Vodafone CEO: Facebook is asking for special treatment; $30-40B M&A stash

Vodafone CEO: Facebook is asking for special treatment; $30-40B M&A stash

11 FEB 2014

Vittorio Colao (pictured), Vodafone’s CEO, said Facebook and other internet content providers are pressing for preferential access for their content in some markets, according to Financial Times.

Colao said Sheryl Sandberg, Facebook’s COO, had asked him to “zero-rate” its content – excluding it from a subscriber’s data plan – as a means to encourage take-up of the social network in emerging markets where users are particularly cost conscious about their data plans.

Colao declined Sandberg’s offer. “It does not make sense……..[there] is no reason why I should give my network capacity for free,” he said.

Facebook is eager to break into new markets while being aware that users are generally more wary of data charges than western markets.

It has already struck deals with other operators in emerging markets who are willing to offer free access, if only as a promotion for a limited period of time. Operators could decide providing such a taster might persuade more users to sign up for data packages.

However, other strategies do exist for content to be delivered in more bandwidth-friendly formats.

Separately, the social network Facebook has already struck an agreement with Singapore-based firm U2opia Mobile to use USSD technology in some markets.

The choice of USSD enables the social network to be accessed on entry-level handsets. U2opia Mobile also works with Twitter.

M&A warchest

Colao, who was speaking at a press briefing in New York, also said Vodafone could have the capacity to spend $30 billion to $40 billion on acquisitions over the next two years.

The operator is weighing up its next move as it completes the $130 billion sale of its stake in Verizon Wireless. Of this sum, the majority is being returned to shareholders. Some of the remainder is being spent on corporate purposes such as debt reduction. In addition, the operator has earmarked an amount for 4G investment.

Colao was not specific about targets (for instance he did not confirm recent reports about a bid for Spanish cable firm Ono), although he did outline the type of acquisition that is on the agenda.

He wants to build up Vodafone’s strength in three areas: fixed-line assets in Europe; its enterprise business globally and mobile operations in emerging markets.

For regulatory reasons, it would be hard for Vodafone to get clearance for any major deals for another operator in Europe where it is usually number one or two in any market where it is active.


Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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