Vodafone chief vows to perform

Vittorio Colao, CEO of Vodafone, has given his first interview since getting to the top of the slippery pole to the Financial Times. 

Hardly surprisingly, he said he wants to improve the company's performance and promises it will become more aggressive and faster during the downturn.

He needs to. In the first half of the year, Vodafone suffered in its home market, the UK, and struggled in Spain too.

Colao constantly stressed the need for speed.

This could be a case of stressing the importance of closing the stable door after the horse has bolted.

Telefónica O2 stole a march on Vodafone earlier this year, regaining its crown as the UK's biggest mobile operator.

O2 , the mobile operator owned by Spain's Telefónica. O2 has strengthened its position as the largest UK mobile operator by offering cheap calls packages to less well-off customers in the downturn.

Last year, O2 beat Vodafone to a deal with Apple to be the exclusive UK network for the iPhone. Mr Colao said it was a "pity" Vodafone did not secure the iPhone in the UK and admitted that may have contributed to the group suffering a higher rate of defections by affluent customers.

Vodafone's problems at some of its core European operations have prompted the company to issue two revenue warnings in successive quarters.

However, Mr Colao expressed confidence that Vodafone would hit its 2008-09 targets on earnings and cash flow. His optimism is based on his plan to cut operating expenses by £1bn (€1.2bn) by 2010-11 and his willingness to reduce capital spending.

Vodafone has forecast £5.2bn-£5.7bn of free cash flow - broadly defined as cash from operating activities, minus capital spending and tax - in 2008-09. Its operating profit forecast is £11bn-£11.5bn.

Mr Colao said the downturn could "slow down" Vodafone's efforts to get more customers to use mobiles that can surf the internet. Turning the mobile internet into a mass market phenomenon is a key tenet of his strategy to increase revenue.

He also said on a "longer-term view" the mobile internet would prove popular in developed and developing countries, given the need for communication on the move.