Vodafone travails require more than caretaker CEO

Different types of 4G, 5G and data radio relay antennas for mobile phone networks are pictured on a relay mast operated by Vodafone in Berlin
Different types of 4G, 5G and data radio relay antennas for mobile phone networks are pictured on a relay mast operated by Vodafone in Berlin, Germany, April 8, 2019. REUTERS/Fabrizio Bensch

LONDON, Feb 1 (Reuters Breakingviews) - Vodafone (VOD.L) needs more than an interim chief executive to dig itself out of its current funk. Margherita Della Valle, who took over on a temporary basis after former head Nick Read resigned in December, had to announce another set of disappointing numbers on Wednesday. Sales fell 1.8% in Germany in the quarter ending December, which accounts for more than 30% of the group’s overall revenue. Vodafone shares fell more than 2% on the news.

Della Valle is accelerating the group’s 1 billion euros cost-cutting plan, and implementing her predecessor’s decisions. A merger with CK Hutchison’s (0001.HK) Three UK is still on the cards. And the sale of half of Vodafone’s stake in German-listed Vantage Towers (VTWRn.DE) has been completed. But an interim CEO cannot take strategic decisions, such as whether or not to sell the Italian unit eyed by France’s Iliad - whose owner Xavier Niel has taken a 2.5% stake in Vodafone. And the group’s poor performance reinforces the case that it is an unwieldy conglomerate of assets without obvious synergies. Vodafone needs a permanent CEO. If the board thinks Della Valle is up to the task, they should appoint her. If not, it needs a permanent head, fast. (By Pierre Briançon)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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Editing by Neil Unmack and Pranav Kiran

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