BARCELONA, Feb 17 (Reuters) - Vodafone (VOD.L), the world's largest mobile phone group by revenue, believes competition will continue to increase in Spain but is not concerned and believes it is on the right track.
Speaking to reporters at the Mobile World Congress trade fair in Barcelona, Chief Executive Vittorio Colao also said he would like to see more partnerships, after the merger last week of Vodafone's Australian unit with Hutchison Whampoa (0013.HK).
Vodafone said that deal would create a company able to take on Australia's dominant operators and Colao said partnerships on investment could also allow operators to share the risk, which would prove especially important during the downturn.
I see several markets where there is clearly over investment and not enough returns to fund the future, he said, when asked if Vodafone would repeat the Australian plan.
Where this will happen I don't know because it depends on catalysts.
But clearly if we want, and we do want, to invest for the future, people must do what we have done.
At the end of the day everybody likes to control a company but do I prefer to be the 100 percent shareholder of a small company in Australia or would I prefer to be a 50 percent shareholder of a bigger and solid player; I prefer the latter.
It creates more value for the shareholders.
One particularly difficult market for Vodafone is Spain, where it has warned of weakness as the economy weakens, and a Telefonica (TEF.MC) executive said recently it would cut its mobile phone tariffs in the market to maintain its customer base in the recession.
The executive said they would do this even if it meant cutting into the average revenue generated per user (ARPU).
Colao told reporters that Vodafone was also cutting tariffs and that all companies were acting to protect their customers.
Considering that we have just announced quarterly results in which we have announced cut prices in Spain and reduced ARPU just to defend the customer base, I think that we are all doing the right thing, he said.
So we need to find resources somewhere else.
Of course it is going to increase competition, but we are not concerned by competition. If it is healthy competition it is a very good thing.
Daiwa analyst Michael Kovacocy said Vodafone could suffer if Telefonica cut its prices and said it could take the British-based group longer to turn around the unit.
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(Reporting by Kate Holton; Editing by Hans Peters and David Cowell)