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How Vodafone was shaped into a behemoth

It says much about Vodafone's relatively youthful status as a public company and its meteoric growth that Nick Read will be only the fifth chief executive in the mobile giant's history when he succeeds the highly-regarded Vittorio Colao in October.
Each of his four predecessors have brought something distinct to the role and have similarly been associated with four distinct phases in the company's development.
Sir Gerry Whent, the first chief executive, oversaw the birth of the company when Racal Electronics, a military radio specialist, was in 1982 awarded one of two licences by Margaret Thatcher to run what was then called a cellular telephone network.He oversaw the race to launch the first mobile phone services in the UK - the first public call was made by the comedian Ernie Wise in 1985 - and quickly put the winner of the other licence, the old British Telecom, in the shade.Sir Gerry oversaw the flotation on the stock market, in October 1988, of what was still called Racal Telecom and was valued at just €1.8bn.It was he who was at the helm when the company was rechristened Vodafone two years after coming to market and he who first saw the company's expansion overseas as it picked up licences to operate elsewhere based on the expertise it had garnered in the UK.
How Vodafone was shaped into a behemoth

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Vodafone CEO Vittorio Colao to leave after a decade in charge.
The second Vodafone chief executive, who succeeded Sir Gerry at the end of 1996, was Sir Chris Gent, a protégé of Sir Ernie Harrison, the East End docker's son who as chairman had taken Racal into telecoms in the first place.His period at the helm is remembered as a period of swashbuckling global expansion, during which Vodafone first moved into the US in a big way with the 1999 acquisition of Airtouch, for $66bn.This was followed a year later by what remains the biggest takeover ever done by a British company - the $183bn acquisition of German mobile operator Mannesmann, which put itself in play after agreeing to buy Orange in the UK, going back on a gentleman's agreement that the two companies had not to encroach on each other's turf.As required by the EU's competition authorities, Vodafone subsequently sold Orange to France Telecom, which today trades under the Orange name.Sir Chris was subsequently criticised for overpaying for Mannesmann, the deal having been done at the height of the bubble in telecoms, media and technology stocks, but his genius was in using Vodafone shares as its acquisition currency rather than cash.That not only meant Vodafone rode out the later downturn in the sector because, unlike some rivals that had used cash to do deals, its balance sheet was not as heavily geared.
How Vodafone was shaped into a behemoth

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Former Vodafone Chairman Ian MacLaurin and former CEOs Arun Sarin and Sir Christopher Gent
It also meant the company's by-then prodigious cash-flow - augmented by the sale of unwanted assets - could be invested in upgrading and expanding its networks, rather than having to be spent on servicing debt.Sir Chris's time is also associated with heavy investment in 3G licences around Europe.It was a thrilling time to be covering the company's fortunes and the soundtrack to it all was Bohemian Like You, a track by the US band The Dandy Warhols, which became ubiquitous as Vodafone became one of the world's heaviest-spending advertisers.When Sir Chris stepped down, in 2003, it fell to his Indian-born successor, Arun Sarin, to make all that investment pay off.
His was a troubled period at the helm to begin with. Shareholders were beginning to tire of the constant deal-making and expansionism and were rattled when, early in his tenure, Mr Sarin made a $38bn offer for AT&T Wireless, America's third-largest mobile player at the time, before being outbid.Things worsened when, in November 2005, Vodafone issued a shock profits warning due to slowing sales in its mature markets.A boardroom row followed, claiming the job of Vodafone's chairman, Lord MacLaurin, after which a startling 15% of shareholders voted against Mr Sarin's reappointment as a director.With the benefit of hindsight, though, Mr Sarin achieved some notable successes.He took Vodafone out of slower-growing markets, such as Japan, Sweden and Switzerland, while taking it into fast-growing emerging markets such as India and Turkey.He also took the difficult but correct decision to write down the valuation of some of the assets bought in the Mannesmann deal - a move which, along with the decision to quit Japan, sparked the clash with Lord MacLaurin.A lot of the work put in during this period has contributed to Vodafone's success now.Mr Sarin stepped down in 2008, which brings us to Mr Colao, the longest-serving chief executive since Sir Gerry.Like Mr Sarin, his time at the helm has been marked not by the buccaneering expansion of Sir Gerry and Sir Chris, but by the unglamorous nitty-gritty of running more assets efficiently and improving the returns they generate for investors.That is not to say that there has not been deal-making. One notable achievement has been tidying up Vodafone's operations in India.Another was ending the uncertainty over the group's position in America by selling its 45% stake in mobile operator Verizon Wireless for $130bn.And, just last week, there was a vast deal confirming Vodafone as Germany's biggest cable operator and second-largest fixed-line operator.The efficiency of the business has undoubtedly improved. Under Mr Colao, Vodafone has returned to generating top-line growth for the first time in many years and, helped partly by the Verizon sale, became one of the UK's biggest dividend payers.
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During Mr Colao's time at the helm, Vodafone has returned something like €100bn to investors in dividends and via share buy-backs, an enviable record.Four very different CEOs, four very different periods of Vodafone's history. With the telecoms, media and technology sectors continuing to develop rapidly, it will be fascinating to see what happens next under Mr Read.
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