Mobile Market

Vodafone: Deutsche Telekom Has Unfair Advantage

Vodafone schulte-bockum by rudolf wichert
The others aren't playing fair, says Jens Schulte-Bockum.
  • Why it matters

    Why it matters

    Vodafone Germany is the third-largest player in the German telecommunications market, and is trying to break Deutsche Telekom’s dominant position in the market through consolidation.

  • Facts

    Facts

    • Vodafone Germany is contemplating a merger with Germany’s leading cable operator, Unitymedia Kabel BW.
    • Vodafone CEO Mr. Schulte-Bockum believes a merger would be good for competition.
    • The merger of Telefonica/O2 with E-Plus pushed Vodafone Germany back to the third rank in the German market.
  • Audio

    Audio

  • Pdf

Jens Schulte-Bockum has been the chief executive of Vodafone Germany since October 2012. The former McKinsey consultant joined the company in 2003, and became head of Vodafone in the Netherlands five years later. He recieved his master’s degree in economics from the University of Chicago. He spoke to Hans-Jürgen Jakobs, the Handelsblatt co-editor in chief, and Handelsblatt editor Ina Karabasz about the challenges facing Vodafone in Europe’s largest market.

 

Handelsblatt: Mr. Schulte-Bockum, the leaders of the telecommunications industry, as part of the German digital network alliance, recently met in Berlin with the E.U. Commissioner for the Digital Economy, Günther Oettinger. Why were you absent?

Mr. Schulte-Bockum: I was attending an event hosted by the chancellor instead. Mr. Oettinger was also there, delivering messages similar to those he delivered at the network alliance meeting, which my cable colleague Manuel Cubero attended.

Were you satisfied with what he had to say?

As digital economy commissioner, Mr. Oettinger has recognized that something has to change. In the past, politicians have not always understood that our industry drives the entire economy. It was long viewed as a cash cow, and yet Europe’s fixed network sector hasn’t been growing for years, and sales in mobile communications are also declining. At the same time, companies are expected to make investments. It can’t go on this way.

What should the new digital commissioner do?

He has three levers. The first one is regulation that supports investment. The second is to permit consolidation, that is, mergers and acquisitions. What we have now is hesitation at the corporate level, which we have to overcome to prevail in competition with U.S. companies. Third, there is the matter of co-financing, that is, the question of how broadband networks are to be expanded in regions with government assistance.

You intend to help him with consolidation – with the acquisition of cable provider Unitymedia Kabel BW. Then you would have a nice monopoly.

We have no immediate plans. But the truth is that another national fixed-network provider would be very good for the German market. It’s the only way to stand up to Deutsche Telekom in the fixed-network sector – and create more competition. To achieve that, we would need cable networks nationwide, which is probably a long-term project.

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