Changes afoot at Vodafone

Vodafone has been slowly drip-feeding clues to the market of its future plans in advance of an eagerly-awaited update on its future strategy later in 2010. Last week’s announcement, which follows earlier news of the sale of its stake in China Mobile, is simply the latest piece of a jigsaw that is beginning to offer a glimpse of the future shape of Vodafone.

The structural changes in themselves reveal little in the way of concrete evidence of further strategic plans, but it’s fair to say that as the Internet erodes the relevance of geographical boundaries and as business continues to be conducted above and beyond simple national borders, so the importance of operating coherently on a cross-regional basis grows. This is especially important in areas such as machine-to-machine communications and wholesale that are going to be so important to incremental revenue growth for telcos around the world. The decision therefore to move Vodafone’s teams focused on global enterprise (responsible for M2M), global marketing and business services out of the European region and into a dedicated commercial unit with global autonomy suggests that these are set to become an important pillar to Vodafone’s future success.

The explosive pace of development in the Internet age means that arguably the biggest enemy of the operator seeking to react to the changes happening all around them is delay and indecision. Contrary to industry rhetoric, operators aren’t blind to the changes happening around them, but all too often appear to be static and resistant to change because red tape and bureaucracy serve to grind decision-making to a virtual standstill. Assuming Vodafone is able to accelerate its speed of decision-making, the decision to simplify management structures is a welcome announcement.

The rationalisation of its operating regions from three into two is logical move, although it’s still the case that the region to be known as Africa Middle East and Asia Pacific (AMEAP) still remains a highly jumbled unit containing markets such as India and Australia that whilst geographically-closer, remain poles apart in terms of market dynamics.

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