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Cost reduction measures announced by Vodafone with little impact in Portugal

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António Carrapatoso, president of Vodafone Portugal said yesterday that the company «does not anticipate any significant effect of personnel reduction» for the Portuguese operation, within the scope of the cost reduction measures that the parent company announced after presenting results this week.

On the sidelines of a dinner debate promoted by APDC, the manager explained that Vodafone’s priority is to grow, adding that cost control measures will always have to aim at that goal. However, he referred to the hypothesis that some areas of the operation, now managed within Vodafone, could be outsourced, as part of an effort to increase cost efficiency.

António Carrapatoso also underlined that Vodafone’s growth strategy in the Portuguese market includes a bet on new technologies such as HSDPA, already launched, and a reinforcement of the bet on fixed-mobile convergence, which will be done either exploring the potential of mobile that can fill customer needs typically associated with the fixed service, either through positioning the market as a «virtual fixed operator», with a stronger focus on technologies such as ADSL.

The possibility of establishing an MVNO agreement with another operator remains under analysis. The official admits that the issue has been studied and that until now Vodafone has not accepted to open its network to the exploitation by another operator because it was not possible to «establish an agreement that had added value» for the company. Still, Carrapatoso believes that if virtual mobile operators emerge this will happen in the next 12 months.

The issue of MVNOs was also mentioned by the operator’s president in the scope of Sonae’s takeover bid on PT, against which Vodafone is against. Carrapatoso defended that the process underway generates instability in 75 percent of the market and considered that if the operation is concluded, it will lead to a concentration without advantages for the Portuguese market.

The official considers that the implementation of the OPA would imply the placing on the market of an excessive number of regulatory remedies, which is not desirable for any market. One of the remedies anticipated by António Carrapatoso would be the creation of MVNOs that «must be established by commercial agreement» between operators and not by regulatory imposition.

«The success of the relationship between MNOs (Mobile Network Operators) and MVNOs (Mobile Virtual Network Operators) depends on the strategic interest of both. An access obligation imposed by the regulator creates distortions», he underlines.

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