Vodafone To Confront VoIP Threat With Data Bundles

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Vodafone Group Chief Executive Arun Sarin Tuesday said the mobile phone operator will look to offer large mobile data bundles in the future to counter the potential threat from Voice over Internet Protocol telephony. Vodafone has signed deals over the past two days with Microsoft for mobile email, France Telecom’s Orange for instant messaging and Google for search technology. Speaking at the 3GSM mobile telecommunications conference in Barcelona, Sarin said: “As an industry we will morph into (the VoIP) space over time.”

Voice over Internet Protocol, or VoIP, is a phone network that utilizes the Internet to make free phone calls. Sarin said consumers using services like VoIP and instant messaging still have to pay for broadband access.

Speaking to reporters on the sidelines of the conference, he added mobile operators currently offer bundles of voice minutes and text. But when High Speed Downlink Packet Access, or HSDPA - a technology that enables higher data transfer speeds - is embedded into Vodafone’s 3G network, wireless data bundles will become possible.

He said Vodafone won’t be doing this over the next six to 12 months, but it will emerge within the next two to three years.

Sarin said this will enable users to employ combinations of instant messaging, search and VoIP technology as they wish.

Asked about wimax - wireless technology that provides high-speed broadband connections over long distances - Sarin said: “If we can get ubiquitous wireless broadband coverage, wimax will be a far less interesting thing when it turns up here in 2008-2009.”

Sarin said there is still potential for consolidation in Europe, possibly among the independent third- and fourth-ranking players in each market.

He cited companies such as Bouygues SA (12050.FR) in France, Wind in Italy and the 3 operations across Europe owned by Hutchison Whampoa Ltd.

On the company’s 45% stake in U.S. company Verizon Wireless, held since 1999, Sarin said:

“Periodically the board looks at our U.S. strategy. Every time we’ve looked at this, we’ve decided it looks like a good strategy.”

“It is a very valuable asset,” he said. “But it won’t stay this way forever. We are very satisfied with where we are today but that is not to say that won’t change.”

Some Vodafone investors, including Standard Life Assurance Co. and Morley, have been putting pressure on Vodafone to dispose of its U.S. asset and return the cash to shareholders.

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