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Vittorio Colao, Vodafone's new chief executive, stamped his mark on the mobile company on Tuesday as he made a swath of management and operational changes across the group.
The shake-up, his first big move since taking the reins at the end of July, includes appointing a new boss in Europe and splitting the group's emerging markets' division in two, leading to the departure of one of Vodafone's most senior executives.
Paul Donovan, head of the emerging markets business and once considered a candidate to replace Arun Sarin as group chief executive, will leave the company at the end of the year. His departure coincides with the splitting of his position into two separate regional roles from January. Vodafone said that it had been Mr Donovan's decision to leave.
Michel Combes, a surprise outsider drafted in from TDF, a multimedia telecoms logistics group, is being brought in as chief executive of the group's European operation from October 1, filling the role left vacant by Mr Colao's promotion.
Some analysts suggested that the move to split up Mr Donovan's empire, which he has run since its creation in May 2006, illustrated Mr Colao's desire to consolidate his power at the world's largest mobile operator. Others believe that the reorganisation of Vodafone's Emapa region — Eastern Europe, Middle East, Africa, Asia Pacific and affiliates — is a sensible move, given the increasing size and diversity of the division.
From January, the region will be split into Central Europe and Africa in one section and Asia Pacific in another. The break-up reflects the importance of emerging markets' business as the group tries to offset slowing growth in its saturated home market. Emerging markets account for almost 30 per cent of Vodafone's revenue.
In Africa, the group bought a 70 per cent stake in Ghana Telecom in July, adding to its presence in Kenya and Egypt. It is also in negotiations to expand its share in Vodacom, the South African mobile operator. Vodafone also holds a 67 per cent share of Hutchison Essar in India and hopes to increase its 3.3 per cent share in China Mobile.
The group is bumping up its executive presence in Asia as the telecoms sector in the region faces change. China is undergoing a government-mandated shake-up to boost competition in the industry, while countries such as Vietnam and Malaysia are opening up their telecoms' markets to foreign investment.
Industry sources say that Vodafone plans to build relationships with governments across Asia as it hopes to break into these new, potentially lucrative markets.
In addition, the group said that its 45 per cent stake in Verizon Wireless, its American joint venture with Verizon Communications, would not be part of any operating region “in light of its financial and strategic importance”. Mr Colao is taking personal charge of the venture, with Andy Halford, Vodafone's chief financial officer, and Terry Kramer, who has been promoted from human resources director to the new post of group strategy and business improvement director.
Analysts at Deutsche Bank said that the move “could ignite speculation that if the asset doesn't fit within an operating division, it might not fit within Vodafone”.
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