EU warns Vodafone over higher prices
Vodafone is in a head-on conflict with the European Commission after warning that mobile companies would slash investment in new networks if regulators did not ease up on prices.
The threat prompted the Commission's vice-president to declare: "I call your bluff -- I am on the side of the customer."
Vittorio Colao, the Vodafone chief executive, used his keynote speech at the Mobile World Congress in Barcelona to attack regulators who have forced down international roaming rates and wholesale interconnection rates at a time when telecoms companies were struggling.
"We should stop having this continuous intervention on prices and let the industry re-invest the money," he said.
His complaint was echoed by two of Europe's industry leaders. France Telecom's chief executive Stephane Richard said: "Europe needs the telecoms industry to stay connected."
Neelie Kroes, a former telecoms executive who is now vice-president of the European Commission, responded with a withering attack on Mr Colao, saying in a memo: "Message to Vittorio and Vodafone: I call your bluff and indeed do not respond well to threats. I take the side of the Vodafone customer."
The Commission has approved a steep cut in roaming rates from June that will pave the way for a 66pc drop in the cost of making a call while abroad within two years.
Roaming accounts for about 7pc of the revenue of European telecoms companies.