Chief builds rep­u­ta­tion as a pruner of as­sets

Financial Times Middle East - - Companies -

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

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