Vodafone's 'Long Term' Hesitance

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When will you move to 4G?

For us LTE is a 2011 or 2012 experience. For nobody is it an experience before 2010.

With all the cool applications out there—music, video, location services, gaming—don't you think consumers will demand greater broadband capacity sooner?

What we can offer today and what Verizon Wireless can offer today is a good wireless experience which feels like a DSL experience. But if you try to do YouTube on it, it's kind of grainy. [As the technology progresses] YouTube looks good, everything looks good. That's a couple of years from now.

Are you saying Vodafone will be developing cutting-edge products on its own?

Some of it we will do on our own. But we've got to get used to this notion of partnering and competing at the same time. It's a hard notion, but in the [Silicon] Valley it happens all the time.

Nokia is getting into the service game in a big way, which makes it a rival. How are you dealing with that?

Of course it's more complicated. It was a straightforward customer-vendor relationship. Now it's a customer-vendor-competitor relationship. That three-tier relationship is harder than a two-tier relationship. My view is that if we can bake a bigger cake together, and that cake has smaller pieces of it, but net-net we still have more cake, that's O.K. with me.

What concessions do you have to make?

As long as we are offering customers compelling services we don't have to fear who else is coming into the marketplace. Google (GOOG) is in the marketplace. Apple (AAPL) is in the marketplace. Microsoft (MSFT) is in the marketplace. Nokia is in the marketplace. But if we have the 250 million relationships [with customers] here, let's make the best of it and get as much of the revenue as possible. And if there is a little bit of a spillover because somebody wants to do a Google search, well that's fine.

With so many new entrants into wireless, from Microsoft to Google, doesn't this apply more pressure to outmaneuver competitors that are known for aggressive and nimble action?

Yeah, but Google is a search company. Good. Important. Relevant. But customers need a heck of a lot more than search from a service provider. They need everything that we do. Search is one component. My view is that we integrate them into our own portal, Vodafone Live.… The Internet is not constructed in a winner-take-all format. Everybody has their own little niche. If you want a portal you go to Yahoo! (YHOO). If you want search you go to Google. If you want auctions you go to eBay (EBAY). It's a concept of "bake a bigger cake."

Let's talk about the push to open wireless networks to more outside devices and services. To what degree is Vodafone interested in offering or allowing cell phones based on Google's open-source Android software platform? What is your view more generally about open-source and open networks?

I don't know how open Android is really. I'd love to see how open it is before Vodafone would commit to using Android. We want to know whether the back end is all Google. Open means the ability to go anywhere you want to go. It's not obvious to me that it's really open. It's open for Google. It's not open for the rest of the world. When you get into the mobile Internet you have to invite others to do cool things.

Finally, what is the fate for you and Verizon (VZ)? Will you ever sell your share of Verizon Wireless?

We're married. It's a good partnership.… Verizon Wireless is a company that has 65 million customers and multitens of billions of dollars in revenues growing at 15%, and good cash flow. I don't know anybody that doesn't want to be part of a machine that produces a billion dollars worth of free cash flow a month. This is a long-term partnership.

So Verizon Wireless CEO Lowell McAdam doesn't want the freedom of being fully independent?

He would be the first one to sing all the songs about why he needs a partnership with Vodafone to get the size and scale and customer reach and all that. Even if you got him drunk he wouldn't say [he's eager for independence]!

Crockett is deputy manager of BusinessWeek's Chicago bureau .