Vodafone Proceeds with European Shakeup

The departure of Vodafone's European head, Michel Combes, could trigger a dramatic reshaping of the company's European operations, according to a Bloomberg report. The report, citing unnamed sources familiar with the matter, claim that the decision by Combes to become head of SFR could lead to Vodafone separating its European subsidiaries into Western and Eastern entities.

Colao

Any reorganisation, which is said to be at an early stage, could see Vodafone divide its operations into three large units: Western Europe, Eastern Europe (comprising Turkey and its Central and Eastern European properties) and a third unit that would include the company's assets in southern Africa and India.

Will Draper, an analyst at Espirito Santo Investment Bank in London, told Bloomberg that Vodafone's Italian head Paolo Bertoluzzo and Serpil Timuray, the CEO of Vodafone Turkey, as internal execs that could take on greater responsibilities, together with Michael Joseph, the former CEO of Vodafone's Kenyan subsidiary who is now director of global payments.

After Combes's departure, "any person who fills that similar position has the potential to move to a bigger role," Guy Peddy, an analyst at Macquarie Securities in London told Bloomberg. "That's the opportunity that's now been provided."

Of note, Vodafone CEO Vittorio Colao said last week that it Turkish unit, which had the fastest growth in service revenue last quarter over any other market, doesn't fit within the current structure "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 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 told Bloomberg.

 

Rumour mill: Telefónica Spain to select Alca-Lu for LTE network

www.lteworld.gr Telefónica Spain is expected to announce that Alcatel-Lucent is to provide the company with a nationwide LTE network, according to a Bloomberg report. Sources close to the negotiations say that Alca-Lu is ahead of rival LTE infrastructure suppliers, with a formal decision anticipated when Telefónica unveils details of its future network strategy at the Mobile World Congress trade show in Barcelona, Spain. The companies didn't comment to Bloomberg. Rumours of the deal, speculated to be worth around €300 million to provide LTE coverage to 65 per cent of the Spanish population, boosted Alca-Lu's share price €0.085 to €1.85 in Paris, valuing the company at €4.3 billion. Commenting on the suggested contract award, Robin Bienenstock, an analyst at Sanford C Bernstein in London, noted that Telefónica needs to deploy LTE in an effort to regain subscribers that have been lost to fixed and mobile operators providing faster broadband services. "LTE will be important, especially in rural areas" where download speeds may be limited to about 2 Mbps, Bienenstock said. "In the absence of significant cable coverage, Telefónica's wireline customers are threatened by faster speeds available through LTE, hence the company has to build LTE to prevent further revenue declines in these areas." Last September, Telefónica announced that Alca-Lu had been selected to help the telco test LTE services for business users in Madrid and Barcelona. Huawei has been providing LTE dongle modems for use in the trial. Data compiled by the market research firm Dell'Oro Group has Alca-Lu holding 30 per cent of the LTE market as of September 2011, trailing Ericsson's estimated 44 per cent market share. www.lteworld.gr