While Vodafone CEO, Arun Sarin, has eased back on the pace of Sir Chris Gent’s frenetic acquisition spree of the late 1990′s, he hasn’t changed the basic strategy, spending ¨£6.6 billion ($11.6 billion) in global assets in 2005. It seems that some are beginning to question this direction as the Vodafone share price languishes.
One particular critic is John Karidis, an analyst at Man Securities, who has calculated that Vodafone has lost its shareholders ¨£12 billion ($21 billion) since 1999 and possibly as much as ¨£17 billion. In other words, in the last 6 years, for every $1 invested in Vodafone, they now have 83 – 88 cents left.
The new Chairman, Sir John Bond, who arrives in July will be under pressure to sort this out pretty quickly and get the giant back on track. A quick win would be to ditch its Japanese business, which has consistently languished, despite their cunning Baldrickesque plan of launching a phone that looks like a lump of cheese.
However, since the majority of the Board is still the same as 6 years ago, a change in strategy would be to admit that they have been wrong all the time. Human nature says that this will be very hard for them to do.
So has Sir John got the stomach for a major change of strategy, accompanied by an inevitable round of senior management blood letting?
One thing’s for sure. He won’t be able to condone continuing to sell dollar bills for 83 cents without wrecking his own business credibility.
Image from Engadget.
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