Vodafone Group Plc has quietly scrapped one of the three principle units it created under a wide-ranging reorganization in April as part of an effort by the world’s largest mobile operator to improve its operational performance.
Back in April 2006, just weeks after surviving a boardroom battle and investor unrest, chief executive Arun Sarin reorganized the Newbury, UK-based operator into three units covering Europe, emerging markets, and new technology. The shakeup was aimed at cutting costs in Vodafone’s mature markets, increasing profitability in emerging markets, and expanding new technologies.
Specifically, this new technology group, known as the New Businesses and Innovation Group, was responsible for adopting Vodafone’s mobile plus strategy and exploiting the arrival of convergence, including the possibility of offering broadband services over fixed-line.
However Sarin has now decided that this unit, led by Thomas Geitner, is to be scrapped. It will devolve its activities into the European Region division headed up by Vittorio Colao.
Geitner was formerly Vodafone’s chief technology officer and it is understood that he will remain at the operator until the end of the year and will not be replaced. According to various media reports, he had turned down a number of other positions at the operator.
This change now means that Vodafone is left with two principle units, namely Europe, which concentrates on Western Europe, and its emerging markets unit, which concentrates on central Europe, Middle East, Asia Pacific, and Affiliates.
The sudden ditching of a unit only six months old has taken some by surprise, especially as it was Sarin’s second change of Vodafone’s organizational structure. However the markets did not seem overly concerned and Vodafone’s share price remained relatively stable.