Vodafone Group Plc (VOD) is considering a reorganization after the departure of European chief Michel Combes, potentially setting out succession candidates at the world’s largest mobile-phone company, two people with knowledge of the matter said.
One scenario involves separating Vodafone’s European operating companies into a group consisting of western Europe and a second entity made up of Turkey, central and eastern Europe, the people said, declining to be identified because the deliberations are confidential. A third group would include Vodafone’s assets in southern Africa and India, said the people, adding that the discussions are at an early stage.
Paolo Bertoluzzo, 46, who runs the Italian unit, and Serpil Timuray, the head of Vodafone Turkey, are among internal executives seen to take on greater responsibilities, alongside Michael Joseph, the former CEO of Vodafone’s Kenyan subsidiary who is now director of global payments, said Will Draper, an analyst at Espirito Santo Investment Bank in London.
Bertoluzzo is also a board member of Vodacom Group Ltd. (VOD), the South African division of Newbury, England-based Vodafone.
After Combes’s departure, “any person who fills that similar position has the potential to move to a bigger role,” said Guy Peddy, an analyst at Macquarie Securities in London. “That’s the opportunity that’s now been provided.”
Simon Gordon, a Vodafone spokesman, declined to comment on a replacement to Combes and any potential reorganization or succession plans.
Vodafone shares declined as much as 1.4 percent and traded 1 percent lower at 168.75 pence as of 2:40 p.m. in London. The stock has fallen 4.7 percent this year through yesterday.
Chief Executive Officer Vittorio Colao, a former McKinsey & Co. partner, is embarking on his third revamp of Vodafone’s structure since taking over in 2008. Combes, the former Europe CEO, will leave Vodafone at the end of July to run Vivendi SA (VIV)’s SFR French wireless unit. Colao formerly held both positions of deputy CEO and Europe chief when he rejoined Vodafone in 2006. He hasn’t said how long he plans to remain as CEO.
Vodafone is seeking to refocus on western Europe, its largest market by sales, as service-revenue growth slows, held back by declining spending in Greece, Spain, Italy and Portugal. A new western Europe unit would have revenue of more than 14 billion pounds ($22 billion) in the six months through September 2011, followed by India and Vodacom with sales of about 4.9 billion pounds. Vodafone is scheduled to release full-year earnings on May 22.
Vodafone is also waiting upon U.S. partner Verizon Communications Inc. (VZ:US) to consider a dividend from their wireless venture for the second year in a row. Vodafone has a 45 percent stake in Verizon Wireless, the largest U.S. mobile carrier.
The Turkish operations, which had the fastest growth in service revenue last quarter than in any other market, doesn’t fit within the current structure, Colao said last week.
“I cannot put it either in mature and sophisticated Europe or in emerging markets because it is at the same time sophisticated and emerging,” Colao said in a May 10 interview with Bloomberg HT TV in Turkey, when asked how he viewed the Turkish market.
“I have to say in this sense it’s clearly an engine for growth, it’s also a sophisticated market and so in that sense it’s also a European market,” he said.
Vodafone said today Deputy Chairman John Buchanan will stand down from the board this summer. Buchanan, a Vodafone director since 2003, was appointed chairman of British semiconductor designer ARM Holdings Plc (ARM) this month. Luc Vandevelde, the former Marks & Spencer Group Plc chairman, will become a senior independent director.
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