Vodafone CEO hits back at D.Telekom in spat over Liberty talks

By Paul Sandle

BARCELONA (Reuters) - Vodafone's CEO Vittorio Colao said Deutsche Telekom's public stance against its plan to buy some assets from Liberty Global was surprising, and he contested its assertion that Vodafone wanted to shut down competition.

Vodafone said this month it was in early-stage talks about buying Liberty Global's cable assets in some continental markets where they both operate, the chief one being Germany.

Deutsche Telekom CEO Tim Hoettges said last week that he thought a deal would be "totally unacceptable" during an earnings call with analysts, according to reports.

Colao said he had to be careful about what he said in response to avoid becoming personal.

"I was surprised by the comment from Tim," he told reporters at the Mobile World Congress in Barcelona on Monday. "I believe that competition is good."

He said the logic behind DT's opposition was interesting, given that it was the largest telco in Europe by market capitalisation, and had the most connections into homes the Germany, which he said was Europe's best market.

"Why does us buying a regional cable company irritate him? I know why it irritates him, but it's not for the right reasons."

Colao declined to give an update on the progress of the talks, which had restarted after a previous attempt failed in 2015, although the two later came together in the Netherlands.

He said Britain, where Liberty's Virgin Media is the leading cable operator, was excluded from the talks because Vodafone was not as advanced in combining fixed-line and mobile services in the country as it was in continental European markets.

"Our priority now is to continue our plan in the UK, to start our convergence in the UK," he said.

"(But) I cannot conclude that in the future we might not also talk about the UK."

Colao, who was one of the major business leaders called into Number 10 Downing Street last year to talk about Brexit, said he had advised the government not to pursue a plan of "managed divergence" from European regulations in data after Britain leaves the European Union because it would damage the economy.

Britain is believed to favour mixed approach of "managed divergence" after it leaves, whereby it will follow EU rules in some sectors and diverge from them in others. European Council President Donald Tusk on Friday called the ideas floated so far "pure illusion".

"When I hear words like 'managed divergence' I don't understand what it means in the data field, because either you're adequate or you're not," Colao said.

"So managed divergence for example in data is something I have recommended not to do to the British government."

Separately, Vodafone on Monday agreed to sell its 51 percent stake in its Qatari operations to its existing partner, the Qatar Foundation, for a total sum of 301 million euros ($370.74 million).

($1 = 0.8119 euros)

(Reporting by Paul Sandle; editing by Douglas Busvine, Jason Neely and Jane Merriman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)