Why didn’t Vodafone come north?

Tributes are pouring in for outgoing Vodafone CEO Arun Sarin, who will leave the company at the end of next month.

As Jeremy Green, mobile director at British IT research company Ovum notes, Sarin shepherded the wireless and DSL operator through difficult years to build a company that just posted a US$13 billion profit. He did it in part by expanding into emerging markets such as Romania, Turkey and India.

Interestingly, he stayed out of Canada, which this week embarked on a wireless spectrum auction tailored for new entrants.Why? Optimists see Canada with wireless penetration of not much more than 60 per cent as a ripe opportunity. On the other hand, pessimists see it as a maturing market with well-financed incumbents like Bell and Rogers.

Green points out Sarin got out Belgium, Japan, Sweden and Switzerland, but not because those markets were mature. Instead, he writes, they were sold because Vodafone only had minority interests in operators there. Green concludes that Vodaphone’s strategy is to cut operating and capital costs through its size, and to do that it needs controlling interest.

Due to foreign ownership rules, he wouldn’t have here, either.

On the other hand, Green points out that in the U.S. Vodafone doesn’t have control over its partner, Verizon. And it is delivering handsome returns.

Of course, Vodafone’s not the only international operator to shun Canada: Germany’s T-Mobile has taken a pass on the Dominion as well.

Meanwhile, as Green writes, Vodafone is hunting “in the manner of a Californian surfer, tracking up and down the coast in search of wherever the best waves are breaking.”

Too bad we won’t find out what it could do here.

(Howard Solomon is assistant editor of NetworkWorld Canada)

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