Get Instant Help From 5000+ Experts For

Writing: Get your essay and assignment written from scratch by PhD expert

Rewriting: Paraphrase or rewrite your friend's essay with similar meaning at reduced cost

Editing:Proofread your work by experts and improve grade at Lowest cost

And Improve Your Grades
Phone no. Missing!

Enter phone no. to receive critical updates and urgent messages !

Attach file

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Guaranteed Higher Grade!
Free Quote
Vodafone Turkey: Fix it or let it go?

The challenges facing Vodafone Turkey

Vittorio Colao was appointed Chief Executive of Vodafone Group plc on 29 July 2008. Given the ongoing economic tumult, one of his first acts as CEO was to stress that the company had to “batten down the hatches” to survive. The days of multi-billion pound deals were over, he added.

Vittorio inherited a global business present in more than 70 countries, either through owned subsidiaries or partnerships. Vodafone had a fast-growing subscriber base, but also some significant profitability sensitivities. A key document awaiting Vittorio’s attention highlighted issues on several continents. Hot topics included the future of Vodafone’s partnership with Verizon in the United States, European countries’ operational performance and the group’s strong growth in emerging markets.

Growth in subscribers, an important performance indicator in the telecom industry, had been driven by acquisitions in emerging markets such as Turkey, India and South Africa. But some of these markets were also hurting the business. Turkey remained one of the most interesting markets for Vodafone, with a growing population, comparatively low penetration and new openings in the regulatory field, but Vodafone was losing market share every day.

Vittorio Colao had many big calls to make, and quickly – and one of the biggest was what to do about Turkey. Changes to group strategy Vittorio Colao’s predecessor was Arun Sarin, who led the company from 2003 to 2008. During this period, Vodafone increased its customer base from 120m to more than 260m. Much of that growth was achieved through acquisitions in emerging markets which had helped to offset slowing growth in increasingly saturated European markets.

Following a series of investments in Europe, India, Turkey and elsewhere, Vodafone reported a record loss of £21.8bn in the fiscal year 2005/06. In 2006, Arun Sarin announced a strategy plan that switched the focus from expansion in new countries to improving operational performance.

In 2008, faced with a negative outlook for the global economy and growing need for change from Vodafone shareholders, Arun Sarin left the company and was replaced by Vittorio Colao. In the weeks following his appointment, Vittorio pledged to continue his predecessor's new strategy, promising “more of the same, but deeper”. Taking office in July 2008, he outlined his five-point strategy for the group:

1. Revenue stimulation and cost reduction in Europe

2. Deliver strong growth in emerging markets

3. Innovate and deliver on our customers’ total communications needs

4. Actively manage our portfolio to maximise returns

5. Align capital structure and shareholder returns policy to strategy

Vittorio’s first priority was cost control. In one of his first interviews as CEO, he stated his intention to cut £1bn from the group's £22bn operating costs by 2011, while shedding jobs to boost cash flow and meet targets. Revenues were expected to fall to £38.8-39.7bn for the 12 months until December 31 2009.1 As part of his focus on existing assets, Vittorio wanted to stimulate increased mobile-phone usage among existing customers, to soften the impact of falling tariff prices in Europe. Organic revenues in Europe edged up 2% to £26.1bn in the year to March 2009. With EU regulators preparing to crack down on the cost of using mobiles abroad, Vodafone predicted that call prices in Europe would drop by 10–15% over the next two years, potentially wiping out gains made through increased call volumes. To counter that, Vittorio planned to sell “more products in the home and the office” as he sought to continue an impressive cash-generation record – annual free cash flow in Europe rose from £6.8bn (in ‘06/’07) to £7.4bn (in ‘07/’08).

Vittorio also identified a “big opportunity” in mobile data: the use of mobiles for SMS messaging (texting), sending pictures and browsing the internet – as well as the use of USB modems, with which customers can connect to the web on their laptops using high-speed 3G networks. Data and messaging revenue in Europe rose from £4.2bn in 2007 to £5.1bn in 2008. Vittorio had high expectations from this market, which in his view “still [had] very low penetration”. By doing more “in the internet space”, he would pursue a long-term strategy to turn Vodafone from a mobile-only company into a total communications operator.2 Vittorio was less specific on his plans for Vodafone's EMAPA unit (businesses in Eastern Europe, the Middle East and Africa, Asia Pacific and affiliates), which enjoyed 14.5% organic revenue growth between ‘06/’07 and ‘07/’08 and would play a major role in the second and fourth points of his strategy. His concern was that the global economic slowdown might.

sales chat
sales chat