Vittorio Colao

Vodafone expected to cut costs by over 1bn euros next year

Paul Rasmussen — Fri, 12 Dec 2008 12:28:02 -0500

The new CEO of Vodafone, Vittorio Colao, is expected to show his mettle in the New Year by instigating a cost-cutting programme to fulfil his promise to save over €1 billion. In particular, the most costly region of Vodafone's straggling empire, Western Europe, will be the prime focus for reducing expense, with Italy, Spain and the UK first on the firing line (although Vodafone Ireland has just announced a headcount reduction of 150 people).

The axe is thought to be hovering over supply-chain departments and new equipment orders, while outsourcing is being considered for logistics, procurement, IT and technology operations. Vodafone has already centralised its handset procurement offices by moving to a single office based in Luxembourg--a country with an advantageous tax regime.

For more:
- go to Mobile Today

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Vodafone seals Vodacom deal, but faces new competition

Paul Rasmussen — Fri, 10 Oct 2008 10:47:12 -0400

After months of speculation Vodafone has acquired control of the South African-based Vodacom for US$2.48 billion. The investment gives Vodafone control of South Africa's biggest mobile operator, together with a vital foothold in booming African markets and signals its intent to keep pace with its rival Orange where France Telecom's emerging markets play is concentrated.

If the deal goes ahead, which would see Vodafone owning 65 per cent of operations in South Africa, Democratic Republic of Congo, Lesotho, Mozambique and Tanzania, the company could face increased competition from its former parent, Telkom South Africa.

Up until now Telkom's shareholder agreement limited its ability to offer mobile services. However, this could now change with a new shareholder dispensation enabling Telkom to target the rapidly expanding market for broadband and mobile data services.

Commenting on the acquisition, John Delaney, research director at IDC, said that the investment was an indication that Vodafone's new CEO, Vittorio Colao, was evidently intent on maintaining the momentum in Vodafone's drive to spread the red rectangle around the globe.

For more on this story:
- go to telecoms.com

Related articles:
Vodafone in bidding war for South African Telkom. Vodafone story
Emerging markets too pricey, says Vodafone chairman. Vodafone story

Vodafone refocuses management structure on emerging markets

Paul Rasmussen — Wed, 10 Sep 2008 12:45:35 -0400

With the revenues from Europe slowing, Vodafone's new CEO, Vittorio Colao, has dramatically reshaped the senior management with greater emphasis on emerging markets -- an area becoming increasingly critical to the future success of the company.

Paul Donovan, the existing head of Vodafone's emerging markets, which includes the unwieldy grouping of Central Europe/Africa and Asia Pacific, has 'resigned' as a result. This region, which generates more than a quarter of Vodafone's turnover, will be split and run by two, as yet unnamed, senior executives.

But these moves have stoked the rumour mill as to what the company will do with its Verizon shareholding and how it can charm Vivendi into releasing hold of SFR, the No. 2 operator in France.

That Colao is taking the US operation for himself shows how important it has become, and the appointment of Frenchman Michel Combes to CEO of Vodafone Europe is intriguing. Who better than a Frenchman to help orchestrate a move on Vivendi, which at a mere €29 billion and with no controlling shareholder, would be a small mouthful for the British giant.

For more on this story:
- go to The Times and The Telegraph

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Emerging markets too pricey, says Vodafone chairman

Paul Rasmussen — Wed, 30 Jul 2008 10:31:29 -0400

Having reported disappointing performances from its highly-penetrated European markets, Vodafone was able to salvage its reputation with strong growth from its investments in developing markets such as Turkey and India. However, the company's chairman, Sir John Bond, stated this week that breaking into these fast-growing countries--naming Russia and Brazil as potential targets, was proving to be increasingly difficult. "There is nothing for sale, and it would be a big challenge for us to agree to a price that would be beneficial to the shareholders. We find price expectations in these markets are quite high."

However, Vodafone's new CEO, Vittorio Colao, clearly wanted to follow his predecessor, Arun Sarin, by focusing on emerging markets with the hope that a deal could be struck shortly to acquire a majority holding in South Africa's Vodacom. The likelihood of this coming to fruition has moved closer over the last few days with the announcement from Vodacom that it has signed an agreement to bring on board a number of black investment groups as part of the country's move to increase black economic empowerment. Vodafone would have to have added black investors to its deal and Vodacom's move means any deal should progress more smoothly, with the new investors retaining their shareholdings.

Speaking about the financial difficulties consumers are facing, Colao said that these economic challenges will need to be understood and new initiatives launched. "I don't think these issues will slow us down, but times change and we need to do things slightly differently. If families feel constrained we are going to give more SIM-only deals, lower prices, maybe less fancy handsets and maybe the handset renewal times will be pushed a little bit further."

For more on this story:
- go to the Financial Times and Guardian

Related stories:
Orange looks to expand into emerging markets. Orange story
Spain disappoints, but emerging markets boost Vodafone. Vodafone story