In an interview with Lusa, the CEO of Vodafone Portugal addresses the consolidation of the telecommunications sector, considering that in Europe it will be "inevitable", says that the operator will continue in Portugal and that he hopes that regulators and the Government understand the current situation of the sector and that they contribute to its continued evolution.

"Vodafone has invested more than 250 million euros every year" in Portugal, says Luís Lopes.

In addition, "we also have a base of people, of collaborators, who not only work for Vodafone Portugal, but we have almost a third of the people working for companies outside the group".

Despite a "difficult context, we have a significant weight in the investment we make and in the role that Portugal has for" the export of services, intellectual property, among others, he adds.

"Now I also have to say that the shareholders or the Vodafone shareholder have seen with no special, well, attractiveness the investment in Portugal for several reasons and, therefore, it is also up to me, and working with the different entities in Portugal, be it the Government, be it regulators", among others, "and try to change this perception" that "Portugal is not a good country to invest in", he stresses.

And this risk of considering that the country is not good for investing exists, "in particular for many years (...) the regulation in Portugal of the telecommunications sector was a significant problem", admits the CEO.

However, there are changes, "in particular in the sector regulator with the new administration", he says, alluding to the new president of the National Communications Authority (Anacom), Sandra Maximiano, who took office at the end of last year.

"We see a much greater openness to dialogue, there are certainly points on which we disagree with the regulator, but the important thing is that this dialogue exists and I see this dialogue now existing", he stresses, admitting the possibility of a "positive evolution".

As for the Nowo business, "it is once again a story that will not contribute and does not contribute to this perception of the country being a good place to invest", he points out, because "no one can understand" the decision of the Competition Authority.

"It is difficult for our shareholders abroad, I cannot explain to them why an operation of this size has this impact. And then once again" they question whether it will be from the regulators in Portugal, whether they should invest in the country, he reports, which translates into a "complicated thing".

"And that is the debate that I would like not to exist, on the contrary, that it was a country in which we all want to invest", he argues, admitting that, contained, that Portugal attracted "some investment, particularly in telecommunications infrastructures", which are the "best" in Europe.

Asked if he had already shared these concerns with the Government, the CEO said that he had not yet.

"I have not yet had the opportunity to meet with the new Government", which "has been in office for a very short time", he considers.

Luís Lopes recalls that the telecommunications sector in Europe has been one of the "least attractive from the point of view of investment" and that "investors have fled", in general, so that their shareholder return "is worse" than agriculture, among others.

"It is the sector that has had the worst returns", where "often [we invest] well over 20%" of revenue every year, he explains.

Over the past decade, "the telecommunications sector has had returns below the cost of capital itself, which means that it is more worthwhile to have put the money to yield something else than to have invested in a telecommunications network", he points out.

In some countries the problem "is even more pronounced than in others", as is the case of Spain or Italy, markets where Vodafone sold its operations since the prospects for profitability of the investment were relatively low.

"For example, in Italy, what was done was a sale to another company, but there is a consolidation", he continues, stating that this is a way of obtaining efficiency gains and "thereby producing slightly better returns that can justify the investments".

In this sense, how does Vodafone see itself as a shareholder in the event that there is no consolidation of Nowo with its Portuguese subsidiary?

"Nowo is not a company that would substantially change our profile (...), it is not a matter of life or death for Vodafone Portugal (...), but having a regulator that opposes this transaction, obviously raises the question: is this country attractive or not attractive from an investment perspective", he poses the question.

In Europe, consolidation "is inevitable". Also because the European bloc "has hundreds of telecommunications operators, as opposed to markets such as, for example, the United States, which have three major telecommunications operators and an internal market the size of Europe", he argues.

Therefore, "American operators operate much more efficiently by scale, have more return, are able to attract more investment, invest more profitably and create a virtuous circle". But if in Europe "there are no consolidations, I fear that the sector at some point will have a much more serious problem than some people see today", he warns.

"In a country where three/four/five networks are built, it is unlikely" that these "will be profitable" and, therefore, "some operator or some operators or all operators end up not having a return on the investment they made in these infrastructures above the such capital cost. And which ones will they be? In some countries they end up being everyone", argues Luís Lopes.

Regarding what he expects in three years, he asserts that "Vodafone will continue on its path" as when it started, 30 years ago, "which is to have the best infrastructure networks in the country".

"We have been pioneers in many things in this country, we will continue to be, we are a reference within Vodafone for what we do, we have a very strong focus on the quality of service we provide to customers", so the message is that "in three years Vodafone will be in Portugal", he reinforces.

"I strongly believe that we will continue in Portugal, I hope that the regulators and the Government create and understand this situation in the sector and that they can also contribute to the sector continuing to evolve, not only creating opportunities for consumers", so that "companies benefit from these technologies, but that operators also have the incentives to continue investing as they have invested so far".

Technology is constantly evolving "and the country's competitiveness depends to a large extent on the telecommunications sector and the health of the sector", he concludes.

Leia Também: Vodafone "regrets and disagrees" with the AdC's decision on the purchase of Nowo (Portuguese version)