♪ francine: vittorio colao a decade growing it into one of the biggest telecom companies. he's radically reshaped the business. part of the transformation included making the company's biggest ever deal, 18 billion takeover of european assets. today on "leaders with lacqua," we meet vittorio colao.

thank you for giving us your time. what defines you as a leader? vittorio: i'm defined by a passion for being in the trenches. i love the operations. one of the best emails that i received when i announced i would step down was from a colleague in new zealand, a customer care colleague who remembers that years ago i've been listening to customer calls next to him for a half an hour. he thought i was an inspector i -- he didn't realize who i was. but this type of thing, next to the action. francine: what was the hardest decision you've ever made? do you remember a guiding principle that make you go forward or was it a business case? vittorio: one that i remember, one hard decision was negotiating very hard with apple. we negotiated very hard. at one point, they asked for too

much. we had to make the decision to let it go. it was hard because we knew it would be a big success. francine: but again at the time, did you reach a point where you said yes, this is our price limit? or did you think, i am open to possibilities? i can let it go at any time. vittorio: i think if i'm honest, the goal was in steve jobs' hands. i'm not so sure if we made the decision or he made the decision. i would say we had clear limits. we are very financially savvy. and we knew that beyond a certain point, it would probably be not a good idea. nonetheless, we wanted to have it because again, staying close to customers, staying close to distribution dealers, i knew it could have been an important thing.

we decided there was only a certain limit. beyond that, we did not go. but it was a bad decision. francine: what is the thing you learned the most about the telecom industry? how has it changed? vittorio: it's changed in many ways. we used to be a meter service, almost a luxury service. i remember when back in the early days, when i started the company in italy, you would use only a certain amount of minutes and know that it was cheaper in the night and more expensive during the day and the weekend for free, this type of continuous thinking of when you should use this wonderful thing, which was a mobile device and now we are in the world of unlimited seamless use. sure if anybody in the world is using them when we sleep, but i think people are

thinking about it. this is changing because we are a volume business, a scale business. convergence has arrived. now we need to distribute data everywhere you are, whether a big screen or smallscreen, medium screen, mobility, non-mobility, it is seamless. this is a big change from this kind of luxury benefit in the early days. francine: the challenges from the telecoms business has changed. what do you focus on? vittorio: the obvious challenge is when you go to this massive volume gains, you on one hand, need to work very hard on cost. of course, i give you an example. data traffic is increasing 60-70%. you use your mobile device 60-70% more this year than last year's user level. and you don't give us 60-70% more. we need to work on cost.

on the other hand we need to remain relevant. when you eat the one chocolate specialty, when you eat a lot of bread, it becomes bread. francine: are you saying i use 60% more data every year? vittorio: if i look at our markets today, we have markets were people use two, three gigabytes per month. markets where the use of 11 or 12, and customers that use 25. this is mobile. then we have fixed. 25-30 gigs per month. now with netflix, all the content, 10 times more than 10 years ago. we're all in that trend because we are going digital.

we use the cloud. we put our documents in the cloud. i recently, i realized that i don't need to take with me all my papers. i just have to put them into the cloud and if i need my drivers license if i'm renting a car, i can just show it like this and they take it. and this is the magic. francine: coming up, talking telecom. vittorio colao walks us through the changing landscape and the biggest obstacles. ♪ francine: italian businessman

vittorio colao has been an executive in the telecoms business for more than 20 years. in that time, he has contended

with huge changes in the regulatory landscape, from the end of charges in europe to transformation in the way data needs to be handled. what kind of leadership does it take to keep telecoms profitable in this changing environment? what comes next? driverless cars? is the telecom industry going to be so ingrained that anything you do in the future, they will be part of it? vittorio: yeah, what comes next is really the biggest change is going to be in the next say, five years probably. four or five, probably. the introduction of 5g, and the spreading of fiber to reach the customers. this will imply that we go down with a delay the signal takes to get to a place. probably 10 milliseconds. this will enable the factor, almost instantaneous connections, and you can take a internet of things, of course

driverless cars, but also industrial assistance, manage from remote. but also logistics, transportation, everything seamlessly connected, which is the next world, the world of everything connected. with a lot of savings, huge environment opportunity, i think, because we will weigh much list. with some challenges, cybersecurity being the biggest. francine: are you ever scared of it? vittorio: i'm never scared. why should i be scared? francine: if you have a key connected to your phone, hacking is a danger. vittorio: breaking into your home is a danger. there are people who can open a car or apartment door in three seconds anyhow today. then the problem is how you make sure this does not happen in italy. what are the defense? we have invested a lot in people who dedicate their lives to defending the systems. and of course the other side, which i think europe quite

frankly got it right earlier than the rest of the world, is privacy, e privacy, all the legislation aimed at forcing companies to be safe. and i think again, initially the reaction was this is bureaucracy in europe. in reality, it is shaping the world. let's go into the future, but with the right protections. francine: i want to come back to regulations. if you talk to me about the huge divestments you've done, what was the most difficult deal? vittorio: i would say we had many. from a decision-making point of view, verizon wireless was a big one. the situation was either we merge the two companies or we split. either we get married or be divorce. i played with both ideas for a while.

then the ceo of verizon came to my home. we had a wonderful discussion, wonderful dinner, and we discussed all the options and of everything else. on the way out, he gave me a big american hug. americans do not like hugging like we like. and he said to me, you have a wonderful family. that's the moment i understood he meant we are divorcing. we negotiated, but that made it clear for me it was time to just have independence. francine: was it difficult for you? vittorio: it was difficult because it was big, but there was big negotiation, and there was $130 billion cash sale. it was big, but the decision was an important one. the complicated one has been the whole type of discussions with liberty, the biggest fixed broadband provider.

we were born as mobile and consumer and we ended up being the largest fixed provider in europe, big transformation, many steps. with liberty, we had many attempts and many steps and many deals. it has been a very long process. francine: it was really your baby. do you feel bad having left vodafone before seeing it through? vittorio: i wouldn't say it was my baby. my baby is the transformation in 10 years from, as i said, mobile consumer to the new thing. and my contribution has been the reshaping of the company, the minorities getting out of china, out of the u.s., concentrating on europe and africa, bulking up the assets there. liberty is one step where i feel -- liberty is one step, do i feel bad? the ceo is a captain of a ship, the piece of the journey. and then another one takes the next leg. that's the way it should be.

francine: is there a danger regulators don't understand the big companies, the big tech companies or telecom properties? sometimes it's difficult for the companies to understand the impact they have or processing data. vittorio: there is that risk, which is why i'm advocating a more intense and more productive dialogue between companies, businesses, and policy makers and regulators. the speed of technology is such that, who knows the assistant? amazon alexa, ok google, etc. what these systems can do is limitless. you can apply that to plenty of domains. some of these things would be fantastic. the implications we don't fully understand. what happens to privacy, family life, social matters. for sure, they have negative

aspects on europe. -- negative aspects on youth. we need to be quicker at adjusting and the old way of regulating before with roles that cover everything doesn't work anymore. we need to be faster at changing. francine: what does that come from? there's a danger that regulation is backward looking. that social media hasn't done. your regulating things in the past. francine: absolutely, and that's why i think when she talks about changing the regulatory frame to more dynamic framework and not static, she is right. we need to look forward, accept and quickerentation intervention if something goes wrong. that's the past. technology doesn't wait. francine: should regulators work together? europe is at the forefront of this. vittorio: i think regulators should talk to each other more

because there's another aspect. technology doesn't really know what the concept of a border is. it's linked to jurisdiction. jurisdictions are important. something back cannot be done , by, but can be done here regulation isn unimpactful. what europe has done is an example of what should be debated because you cannot have different approaches. i'm an advocate for a tighter, better debate rather than the stick of the carrot and the big stick of regulation. we need to debate more. francine: what kind of regulation would you do? for the internet of things, is it data protection or intellectual property protection? vittorio: i think you need to have both. you need to protect intellectual property and you need to allow

-- if i were to have the next driverless car, i would need to benefit from it. we need to also find a way for social good. i will give you an example. if i cross the river certain times of the day, one time with a bicycle, one time with the car, it's important information for people have to plan the roads, plan transportation. while i want to protect my privacy, i'm happy the city of london is managing in a better way. the same applies to help. -- the same applies to health. i want to protect my health data. the wristwatch, my doctor, how my heart is going. and data is used to improve heart disease treatment, i'm happy also. we need to find this common ground between intellectual property protection and common good, and work together. technology allows this. of course, it's complicated.

it's neither white nor black. francine: up next, the importance of diversity. we talk about colao's big push to make the workplace better for women. ♪ francine: diversity has been a

priority during vittorio colao's decade. the company rolled out a policy and launched what it says is the world's largest program to recruit women who have taken a clear break. -- taken a career break. but he isn't just pushing for change at his company. as part of his equality campaign, vodafone has committed to expanded access as tools of female empowerment around the globe.

francine: you have tried to fix diversity on a wider scale. why? vittorio: you know, there is one thing that i always found irritating when people talk about diversity. and it's this story that many specialists say, companies should really promote diversity because there is a business case, because you make more money. because diverse companies make better decisions. whatever. i always say this is a very utilitarian type of argument. i do it because i make more money. i do it because the company is stronger. i do it because i have a return. i was really irritated because i think it's wrong. i think we should do things because it's right sometimes. i could make the opposite case. what if i find an environment , a country where having women is not the smart thing from a profit point of view? what if i find a country where

discrimination is good? if i can make the opposite case, does that make exclusion right? does this make discrimination right? of course not. i decided i would go for the right thing and maybe philosophical, there is principles behind it. we have to do the right thing. to be honest, personally, i worked at mackenzie at the earlier part of my life. it was dominated by essentially white middle-aged men in white shirts and red ties. and then i went to a startup. when you are in a startup, you do not give a damn about the gender. you need good people and you need results. we ended up with a wonderful diverse, men, women, age was irrelevant. that convinced me, and this was really the second part, it convinced me it was worth fighting because it was right.

and honestly, it was more fun. francine: why are we still talking about diversity? sometimes quota, retaining talent for women, different in 2018? vittorio: quotas are fine as long as they are interpreted as objective aspiration or objectives or target, if you want. what i don't like of quotas is very simplistic, we say 30% of the board or 35% of the top team. it's the whole pyramid. if you don't fill the pipeline, i always say you can have women in the top force, but if you don't have women in the elevator -- actually, if you look at the nordic countries, they have a lot of women in top positions, but they don't have women in the companies. is this what we want? it's part of what we want, but is not what we want. what we want is to have

equality. rather than target, i prefer targets even if we don't hire's, we want senior persons to interview. just to teach the junior person. we don't overrule decisions, but we want a senior person to teach a junior person how to look at diversity. it may be another 15 years, but we are moving and the important thing is to keep the pressure. francine: is there something you implemented that you thought was successful in retaining talent? is it cutting down meetings, is it, maternity leave is it something else? vittorio: i think it's a combination of two things, one, policies. maternity leave. we have returning mothers, policies where we rehire people out of the job because of maternity period and they come back to work three, maybe five years later. we have forms of flexible

working, and remote working, all the classic things you would expect a telecom company to have. that is clearly part of the things. but at the end of the day, i really believe that a strong intervention from every layer of the hierarchy on the decision-making. which at the end are promotions and unfortunately sometimes, demotions and firing. intervention from the top to really be sure there is no unconscious bias. i do not think in our company we have deliberate bias. and i am full of unconscious biases. i'm a champion and all the nice things people said about me, but i know i have biases. there are certain styles that naturally influenced me. i try to control it. i am not sure i really control it, so i need another person to tell me. francine: is it through training

also? vittorio: we have funny videos of stereotypical but strong situations where people misbehave or behave or use words, for example, vis-a-vis another topic not unrelated, lgbt, words or expressions that to most people mean nothing to specific statement of people hurt, orharmful, or racist, that may not be but i'm a great fan of talking. if i say something wrong, i will tell you. don't keep it to yourself. if i say no, i understand there is a problem. we are a problem that talks a lot about these things and we challenged each other. but we are still a long way and we are not there.

we are still at below 30% and trying to accelerate. francine: vittorio colao, thank you so much. vittorio: thank you. ♪

♪ manus: you are watching the best of "bloomberg daybreak: middle east." major stories in the headlines in the region this week. saudi arabia defies demand to hand over khashoggi suspects. iran uses the scandal to score points against its archrival. a miserable month for global stocks, they slumped in october as trade tensions have sent the central bank tightening. geopolitical risks spook investors. as merger mania rages in the gulf, the ceo of dubai's central bank says he is still waiting for a perfect match. ♪