Chief builds reputation as a pruner of assets
Vodafone’s move to team up with Idea Cellular in India, hailed as a momentous deal to create the largest telecoms player in the subcontinent, also represents the latest move by its chief executive to dilute the ownership structure of its global network.
The strategy to forge joint ventures, in markets where Vodafone is struggling to go it alone, is a volte face for Vittorio Colao, who built his reputation by tidying up all of its minority stakes. “I don’t think we have to be religious,” he said of the shift to merging, in markets including India, Australia and the Netherlands. “We have to be pragmatic,” he said.
With more deals potentially on the horizon — notably in the UK, where a merger with Liberty Global’s Virgin Media has long been mooted — the new structure has raised questions about how it should be seen by investors.
“It is increasingly becoming a holding company of telecoms assets,” said Raymond James, an analyst Stephane Beyazian.
Mr Colao started to unpick the messier parts of the Vodafone empire he inherited in 2010, when shareholder agitation about performance began to surface. “We are not here to manage minorities,” he said, in a pointed statement before its annual meeting that year.
It was a message to those that had started to question why growth, at the once swashbuckling business, seemed to be stalling. Mr Colao has since forged a reputation as a pruner of assets rather than a builder of empires. Nic Fildes