Vodafone revamps to cut costs

Vodafone Group PLC Thursday announced a restructuring of its business operations and senior management, aimed at cutting costs and driving growth in emerging markets and new services.

Vodafone will now have three new units: Europe; Central Europe, Middle East, Asia Pacific and Affiliates; and New Businesses and Innovation.

Vodafone’s Chief Technology Officer Thomas Geitner will become chief executive officer (CEO) of the New Businesses and Innovation group, which will focus on such areas as converged and IP (Internet Protocol) services, according to the company.

Notably included under this unit is Vodafone’s German fixed-line subsidiary Arcor AG & Co. KG, which the operator acquired through its acquisition of Mannesmann in 2000. The inclusion of Arcor in this group could reignite rumors that Vodafone is planning to get into the fixed-line business, which would be a major strategy shift for the mobile operator.

Bill Morrow will take over as CEO of the European business. Morrow is currently president of Vodafone’s Japanese mobile business, which the company is in the process of selling to Softbank Corp. for US$15.3 billion, in response to fierce competition from domestic operators in that region.

Paul Donovan, currently CEO of the company’s OVS (Other Vodafone Subsidiaries) unit, will head up the Central Europe, Middle East, Asia Pacific and Affiliates group, which will focus on growth in emerging markets and partnerships with affiliates, including Verizon Wireless, China Mobile, Vodacom and SFR.

The changes will be effective May 1.

The organizational restructuring comes on the heels of the resignations last month of Vodafone’s Christopher Gent, honorary life president, and Peter Bamford, chief marketing officer.

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