Vodafone CEO Colao makes way for protégé Nick Read
Vodafone Chief Executive Vittorio Co lao will step down in October after 10 years at the helm. The Italian re shaped the world’ s second-largest mobile operator into a digital communications power house with a string of deals. Co lao will be replaced by Nick Read, finance director since 2014, whose broad international experience had marked him out as the likely next leader of the group.
Vodafone Chief Executive Vittorio Colao will step down in October after 10 years in which the Italian reshaped the world’s second largest mobile operator into a digital communications powerhouse with a string of major deals.
The urbane Colao will be replaced by Nick Read, finance director since 2014, whose broad international experience had marked him out as the likely next leader of a group with 536 million mobile customers and ^47 billion ($56 billion) in revenue.
He will take charge of a group that, under Colao, pulled back from its once brazen expansionist drive, most notably when it sold out of the United States with a $130 billion exit from a joint venture with Verizon.
Last week Vodafone struck a $21.8 billion deal to buy Liberty Global's cable TV and broadband networks in Germany and other markets to strengthen its business in Europe, where 35 per cent of its proforma revenue came from fixed line last year.
And in India, which it entered with great fanfare in 2007, it is merging its operations with Idea Cellular to bulk up in a market that has been hit by intense competition.
“The chapter that Vodafone is now starting to write is completely new,” Colao told reporters. "It is the right time ... to start with a new dedicated management team.” Read, a Briton, will be replaced by his deputy since 2015, Margherita Della Valle, an Italian who joined the group in 1994.
Analysts said the timing of the departure should come as no surprise and that investors should be reassured by Read’s appointment due to his experience running its British operations and the emerging market assets.
The change came as the group published solid 2018 results and a more cautious 2019 outlook due to price cuts in Spain and an expected increase in competition in Italy. Its shares fell 3.5 per cent.
Read said he had been alongside Colao through the process of reshaping Vodafone, and he would now deliver the benefits for shareholders and customers.
“I think now is the time to really focus on our organic plan, really focusing on digital transformation of our business and the customer experience,” he told reporters. “And of course there's a big opportunity of integrating these new businesses, both Liberty and over in India.”
Having joined Vodafone in 2001, Read’s roles have included running the British and emerging market operations. He has also sat on the boards of the company's listed operations in Africa and Qatar, its subsidiaries in India and Egypt and its joint venture in Australia.
One area that remains to be tackled is Britain, Vodafone's home market where it languishes in third place behind BT’s EE and Telefonica's O2. Annual organic service revenue there fell 3.5 percent, compared with growth in the rest of Europe.
The management changes were announced as the company reported a 1.4 per cent rise in organic service revenue for its fourth quarter, beating analyst forecasts of a 1.1 percent rise.
Full year core earnings rose 11.8 percent to 14.7 billion euros, beating guidance for “around 10 per cent” organic growth and just ahead of analyst forecasts of 14.6 billion euros.
For 2019, the group struck a more cautious tone with a forecast of organic core earnings growth of between 1 and 5 per cent, and free cash flow before spectrum costs of at least ^5.2 billion, slightly down on the 2018 number of ^5.4 billion.