2010 Year in Review: Vodafone--A new strategy

Vodafone entered 2010 worrying about mobile networks being overloaded by smartphone data, and that Google and Yahoo controlled up to 80 per cent of the mobile search and advertising market.

Such was the concern that Vodafone's CEO, Vittorio Colao, said that the Google/Yahoo issue needed to be addressed "before it is too late."

While little progress would seem to have been made with these industry-wide matters, during 2010 Colao gave indications that he wanted to radically shift the company away from being a significant player in almost any territory, with the focus now sharpened to building on the opportunities in Europe, India and Africa.

By mid-year, the CEO was able to hint at new directions on the back of announcing the first quarterly service revenue growth since the recession started 18 months ago. Of note was the huge leap in data traffic generated by smartphones and 3G dongles--up 25 per cent.

But the telecoms world had to wait until September for Vodafone's new strategy that would "drive shareholder value."

What Colao announced was a move to divest some of its minority stakes in operators in Europe, India and the US--and a reduction of its regional structure from three to two--put simply, Europe and non-Europe.

The minority holdings--Verizon Wireless, France's SFR, Poland's Polkomtel, Bharti Holding and other companies, were lumped into a single group headed by the CEO. While it has become clear that the company is actively looking to now sell its SFR and Polkomtel holding, what happens in the US and India is far from immediately obvious.

During the year the company also sold its 3.2 per cent holding in China Mobile for £4.3 billion, gained £3.1 billion from the sale of its shareholding in Softbank and is wanting around £7 billion for its 44 per cent share in SFR.

This cash mountain--the envy of other European operators--could be further boosted if the company meets expectations of financial analysts--a £12 billion operating profit in 2010, and increase for the next two years.

However, the firm admitted in November that it was experiencing issues in southern Europe with "decoupling", with countries such as Portugal, Spain, Italy and Greece reporting a weaker performance than their northern neighbours.

Going into 2011, Colao has stated that Vodafone wanted to provoke greater usage of mobile data and introduce tiered-data pricing to help prevent network congestion.

To take advantage of this trend, Colao stated that the company's new strategy was now designed to make it the leading mobile data operator for enterprises of all sizes in Europe, India and Africa. He also committed the company to increasing its investment in its high-speed networks in Europe, and further develop those in India and Africa.

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