Colao admitted at the Morgan Stanley Technology, Media and Telecoms conference in Barcelona last week that this action was needed, adding, according to Bloomberg, "because I don't know what the economy will be."
Commenting on the monetary problems and sovereign debt crisis in Europe, Colao said Italy was at a crucial moment in terms of consumer confidence as a new government there decides how to impose austerity measures. He also highlighted the fact that the company had taken a recent write-down in Greece, while Spain is weighed down by a poor market structure and weak consumer spending. However, the UK, Germany and the Netherlands had held up well.
Despite this somewhat gloomy outlook, Colao told Reuters that the group could increase its capital expenditures, such as in the UK, but said it would not be significantly higher. "Can I see a little bit more capex?" he said. "Maybe, but a huge amount? No."
Separately, Colao revealed that tension between Vodafone and Verizon Communications over their U.S. joint venture Verizon Wireless has eased, and the success of new partnerships could determine if that relationship goes any further. "Personally I'm excited that we are doing the right thing," said Colao. "How deep this becomes will determine what eventually will be the final state (between us)."
"We may decide that this is the perfect state...if we don't see anything further we'll say fine, we'll stay here and be good partners, we help them in allowing them [Verizon Wireless] make investments, they give us dividends, we cooperate together," he told Reuters.