Vodafone strategy change may be near

Executive changes at Vodafone Group PLC, including the announcement on Sunday of the resignation of Christopher Gent, life president of Vodafone, indicate a battle over the future direction of the company, analysts say.

"It's about an impending strategy shift, which the old guard may find difficult to accept," said James Enck, European telecommunications analyst at Daiwa Securities SMBC Europe Ltd.

On Monday, Vodafone Chairman Ian MacLaurin issued a statement saying that he and the board are fully supportive of Arun Sarin, Vodafone's chief executive officer. He said his comment was in response to recent press reports that have described a supposed rift between Sarin and some board members, led by MacLaurin and representing Vodafone's historic mission as originally outlined by Gent.

Gent is widely credited with turning Vodafone into an international operator with a mobile-only strategy. But recently, an increasing number of operators around the globe are looking to deliver multiple services and also to combine those services for customers. "No one can afford to be a one-dimensional, one-technology company anymore," Enck said.

An examination of Vodafone's holdings hint at a potential impending change in strategy that could include a fixed-line business, he said. For instance, historically when Vodafone has made an acquisition that includes a fixed-line operation, it sells the fixed-line business, he said. However, with its acquisition of Mannesmann in 2000, Vodafone acquired Arcor AG & Co. KG, a wireline operator, and has yet to sell off that business.

In Germany, Vodafone competes with T-Mobile Deutschland GmbH, whose parent company has a fixed-line business. O2 (Germany) GMBH & Co. OHG, another mobile operator in Germany, was recently acquired by Telefonica SA, which has a DSL (Digital Subscriber Line) offering in Germany. Over the weekend, Enck heard rumors of a potential tie-up between E-Plus, another German mobile operator, and QSC AG, a DSL provider in Germany. Vodafone can better compete with those operators in Germany if it retains Arcor, Enck said.

Vodafone lacks a wireline operation in its other large European markets, including the U.K., Italy and Spain. But the company could be in the process of freeing up cash to make purchases of wireline businesses in those regions, Enck said. Earlier this month Vodafone announced that it is in discussions to sell its unit in Japan. Rumors have also surfaced recently about Vodafone possibly selling its stake in Verizon Wireless Inc.

Vodafone has not yet responded to a request for comment on the executive changes and a potential shift in strategy.

In addition to Gent's resignation, Vodafone announced last Wednesday that long-time Vodafone executive and Chief Marketing Officer Peter Bamford would resign on April 1.

Source :http://www.infoworld.com/article/06/03/13/76375_HNvodafonechange_1.html