Vodafone's chief executive urged the UK to stay in Europe today and warned that uncertainty over a potential “Brexit” could damage the business.
His comments come as a referendum on the UK’s membership of the European Union looms into view - potentially as soon as next year following the Conservatives’ shock election win. The German bank Deutsche is reviewing whether to move swathes of its 9,000 staff out of the UK in the event of an exit vote, although the founder of JCB diggers maker Lord Bamford has said the UK could “exist on our own”.
Vodafone's chief executive Vittorio Colao said: “The decision to stay or exit is clearly a political decision, it is for the British citizens to decide. But as Vodafone we are convinced that for our shareholders, customers and for the company itself, it would be good to stay in Europe and it would be good to support the creation of a single digital market. Europe needs a large digital marketplace in order to be competitive with America and China essentially, and it’s good for Vodafone to be a part of it.”
On the consequences of the build-up to an exit vote, he added: “Uncertainty is never good for business, although Vodafone is very large and we are in many countries inside and out of Europe so we can deal with uncertainty - it’s never good, but we can deal with it.”
The former Tory Party treasurer Michael Spencer played down the threat an EU referendum poses to the City.
He said this morning: “I’m not sure it’s going to have such major implications for business. I expect the country will vote to stay and then we’ll put it behind us.”
Mr Colao said the £60bn behemoth Vodafone managed its first growth in services revenues for nearly three years in the quarter to March, up 0.1 per cent. European markets have struggled for years amid a squeeze on consumers and enforced price cuts from regulators, but Mr Colao has seen “signs of stabilisation” in Europe amid a huge surge in demand for 4G data.
The firm now has more than 20 million 4G customers in 18 markets, with data volumes up 81 per cent year on year. In the UK, where Vodafone has 3 million 4G customers, data demand has “exploded”, Mr Colao said. The UK has seen growth for two quarters running and Vodafone should manage its first growth in underlying profits since 2009, guiding the City to expect between £11.5bn and £12bn this year.
The Vodafone boss also warned again over the competition threat of BT’s £12.5 billion merger with EE, saying the deal could end up “remonopolising” the market.
He wants Hutchison Whampoa - which is buying O2 - to pull its Three business out of a network sharing deal with EE, to avoid one company controlling 75 per cent of traffic. He is also concerned over the enlarged BT business claiming 60 per cent of the 4G mobile spectrum, as well as the cost of rivals’ access to its fibre network.