The Sunday Papers today have decided to turn on Vodafone. The business section of the Sunday Times (largest quality paper in Britain) reports that Sir Chris Gent has fallen out with the man he appointed to succeed him.
The Sunday Telegraph tells us that Vodafone plan a record £5Billion dividend payment in an effort to keep the CEO in his job, could this be greenmail from the hedge funds? They also write in the comment section that the problem was that they forgot the shareholder. Well I beg to differ, the problem with Vodafone was that they forgot that the business is based on infrastructure and allowed Marketing Executives to take control at a period when they were entering increased complexity thanks to UMTS. In allowing Marketing to run the business they have raised expectations whilst reducing the ability to execute. Some of the ideas developed by Consultants have been very good based around Vodafone Simple and Handsets in general have been good, but Live have not been the success that it should be.
The Observer focuses on te fact that Vodafone is shrinking its footprint in a effort to keep the City happy the Company might be broken up. They interview a number of analysts about the prospects who say that times are hard but if Vodafone can execute then they might just turn in around.
Can Vodafone achieve what they outlined at the hight of the market when it became the biggest company in Britain? Looking from the outside in I have to say that the problem is that too many excellent managers have left the business. The big question has to be can the incoming Chairman get the business back on track? The generation that has just ended with Lord MacLaurin stepping down as Chairman has seen a business that was very young put in place formal processes. Now that the business can be managed by professionals the challenge is will the executive team blink? If they are talking about paying an extraordinary dividend thyen I would have to say they have done so.