Leadership rows hit France Telecom, Vodafone

 

Investors and top executives are calling for the heads of the bosses at France Telecom and Vodafone, in two separate management crises.
 
Didier Lombard, chief executive of France Telecom, is under pressure to step aside into a non-executive director role after staff morale plunged so low in 2009 that many workers committed suicide.
 
Lombard’s heir Stephane Richard is leading the charge against the current chief executive. He questions whether the current management structure will allow France Telecom to meet its goals for 2010, but is reportedly keen to keep Lombard in a non-executive position so the firm can continue to benefit from Lombard’s long experience in the telecoms industry.
 
Richard was unveiled as Lombard’s successor in April 2009, and was due to take the helm from June 2011. However, the leadership crisis could see Richard installed as chief executive by end-February, reports state.
 
Vodafone’s investors are behind the speculation regarding chief executive Vittorio Colao’s position.
 
They are growing frustrated by the carrier’s underperformance in Europe, where it has lost ground to rivals in Germany, Spain, and the UK since Colao took over in July 2008.
 

 

 

The carrier’s performance is also impacted by an ongoing dispute with Verizon Communications regarding dividend payments from Verizon Wireless, in which Vodafone holds a 45%. Verizon Communications holds the remaining 55% and has blocked dividend payments from its wireless business since 2005.
 
Those payments could help improve Vodafone’s financial standing, and could help keep Colao’s neck off the chopping block. However, plans for payments to resume in 2009 were scuppered by Verizon’s acquisition of rival US carrier Alltel.
 
The crisis could fuel calls from some investors for Vodafone to be split up, after they questioned whether its mature markets sit well with its strategy in emerging markets.

 

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