Organisational Structural Change in Vodafone

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Organisational Structural Change in Vodafone

  1. 1. Joydeep Barman Roll No.-12/MBA/63
  2. 2.  Vodafone Group plc is a British multinational telecommunications company headquartered in London and with its registered office in Newbury, Berkshire. It is the world's third-largest mobile telecommunications company measured by both subscribers and 2013 revenues and had 453 million subscribers as of June 2013.  Vodafone has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalisation of approximately £89.1 billion as of 6 July 2012, the third-largest of any company listed on the London Stock Exchange. It has a secondary listing on NASDAQ.  The name Vodafone comes from voice data fone, chosen by the company to "reflect the provision of voice and data services over mobile phones"
  3. 3.  The first of these occurred on 29th June 1999 when Vodafone completed its purchase of AirTouch Communications, Inc. of Germany and changed its name to Vodafone Airtouch plc.  On 21st September 1999 Vodafone agreed to merge its U.S. wireless assets with those of Bell Atlantic Corp to form Verizon Wireless
  4. 4.  Acquisitions also continued and in 2001 Vodafone takes over Eircell (part of eircom) in Ireland, rebranding the company Vodafon Ireland. A year later Vodafone acquired Japan's third-largest mobile operator J-Phone, which was the first operator to introduce camera phones in Japan.  A major shift came on 17th December 2001 where Vodafone introduces the concept of 'Partner Networks' by signing TDC Mobil of Denmark.  On 18 September 2002, Vodafone signed a Partner Network Agreement with MTC group of Kuwait. The agreement involved the rebranding of MTC to MTC-Vodafone.
  5. 5.  In November 1998 Vodafone purchased BellSouth New Zealand which later became re-branded as Vodafone New Zealand.  On 15 November 2004, Vodafone Group announced a group-wide co-operation agreement with América Móvil of Mexico. The agreement involves co-operation on international services and roaming.  On 26th March 2004, Vodafone acquires a 67% stake in Hutchison Essar for $10.7 billion. The company is renamed Vodafone Essar. 'Hutch' is rebranded to 'Vodafone'
  6. 6.  Changes in organizational structure can result from a merger or acquisition, economic changes and process changes. These changes are usually initiated due to the organization‘s desire to reduce costs, improve processes or increase communications. After a merger or acquisition takes place, the company may have to reorganize in order to avoid duplication of processes and maximize the strengths of both organizations. Mergers and acquisitions usually require one organization to absorb the employees and processes of the other organization.
  7. 7.  High Level of Centralisation: Vodafone board remained as the ultimate decision maker. Merged and Acquired companies will not enjoy any legal power.
  8. 8.  In 2010, 3G and 4G telecom spectrum were auctioned in a highly competitive bidding. The winners were awarded spectrum in September, and Tata Docomo was the first private operator to launch 3G services in India.  The private companies which participated in the auction were:  Airtel  Aircel  Idea  Reliance Communications  S Tel  Tata Teleservices  Vodafone Essar (now Vodafone India)
  9. 9.  • Vodafone is owned jointly by Vodafone and Essar whereas Airtel is owned by Bharti Airtel  • Airtel has presence in all 23 telecom sectors whereas Vodafone has presence in 16 circles only  • Airtel has a much bigger customer base than Vodafone  • Airtel relies on celebrities to promote its services whereas Vodafone has a smaller budget and makes use of animated characters (zoozoos).  • Airtel offers a number of products and services while Vodafone is mainly involved with mobile telephony
  10. 10.  Operator group Vodafone has seen a 90 per cent year on year drop in profit for the full year ended March 2013.  The operator posted a profit of just £673m, down from £7bn a year earlier, hit hard by a £7.7bn impairment charge in Italy and Spain over the course of the year.  Group revenue also fell by 4.2 per cent to £44.4bn while full year organic service revenues declined by 1.9 per cent.  The Indian arm of Vodafone Group Plc, the world's largest private mobile phone company, has recorded a £9-million operating loss for the first six months of the fiscal ended March as payments on debt raised to get 3G licences and corresponding network expansion kicked in.  Vodafone has had a horror run over the past 18 months, with a record number of complaints about its service and the loss of about 375,000 customers.  Moody's affirms Vodafone's A3 ratings; less stable outlook
  11. 11.  Sales: The Vodafone sales teams and resale channel partners were used to selling mobile tariff plans and calling options. The language of web- conferencing services, however, was new to them. As a result, Cisco IBSG educated Vodafone’s sales staff on the new vocabulary and provided appropriate tools, support, and compensation plans to help them sell these new services effectively.  • Service Operations: Different working procedures and practices were needed to reduce risk and simplify key operational areas. New services such as web-based conferencing would align Vodafone business operations that were previously separate. A new set of processes and operational interlocks was implemented to allow different parts of the business to interact with each other and with external partners and agencies.  • Billing Systems: Billing integration is a major component of the service-operation model, and one of Vodafone’s most challenging areas. Billing integration is influenced by different service-pricing packages such as pay-per-use, flat fee, or a combination of the two.  These initiative forced Vodafone to undertake a massive $500m refresh of its mobile network.
  12. 12. Under the new structure, the company has created two new roles at the top level — the Chief Operating Officer and Chief Commercial Officer.  Mr Sunil Sood – who is currently Director Business Operations, for South and West – will be the COO while Mr Sanjoy Mukerji, currently Director Business Operations for North and East, will be the Chief Commercial Officer. Both will report to CEO Mr Marten Pieters.  The existing position of Chief Marketing Officer will cease to exist under the new plan. Mr Kumar Ranganathan the current CMO has been given a global role to work on Group's commercial functions  In addition, the company will have another new role of Director External Affairs who will be responsible for corporate communication, public affairs and Vodafone foundation.
  13. 13.  A new role of Business Development & Innovation has been created aimed at building roadmap for innovation across voice and data products. This will be headed by Mr Jonathan Bill, Director, Corporate Communications .  The Project Management Office (PMO) and Fast Forward teams will be separated. The PMO will move to the technology function, reporting to Mr Vishant Vora, Chief Technology Officer as most of the strategically important programmes tend to be technology programmes or strongly technology dependent.  ―These changes will help strike a better balance between our operational intensity and the need to focus on emerging areas for the company‖--- CEO  http://articles.economictimes.indiatimes.com/2012-02- 02/news/31017134_1_indian-telcos-new-posts-top-management
  14. 14.  Vodafone announced changes to its organisational structure that are designed to ensure a more efficient and effective delivery of its Vodafone 2015 priorities. The new structure will allow Vodafone to implement its consumer and enterprise plans more quickly and consistently, accelerate growth in unified communications and achieve greater efficiencies from scale.  From 1 October 2013, Vodafone will merge its Northern & Central Europe and Southern Europe regions into one Europe region and will report its Turkish operating company within the Africa, Middle East and Asia-Pacific region from that date given that country‘s emerging market characteristics.
  15. 15.  Vodafone is also creating an expanded Group Commercial function, comprising Brand, Consumer, Unified Communications, Terminals, Customer Operations and Partner Markets. It will also encompass the recently-created Group Enterprise organisation.  Vodafone said that the group‘s CEO, CFO and Strategy & Business Development Director will be responsible for overseeing strategies relating to other Vodafone investments.
  16. 16.  The Vodafone group simplify accountability for it‘s subsidiaries with the creation of two ‗operating regions‘: Europe, which will include operations in European countries in addition to the Czech Republic, Hungary, Romania and Turkey; and Africa, Middle East and Asia Pacific, which will include Australia, New Zealand and Fiji.  Two further units are to be created: Group Commercial, which will include the previous activities of Group Marketing, Vodafone Business Services, Vodafone Global Enterprise and Partner Markets; and Group Technology, which will oversee all of the company‘s technical activities.  The changes came with 12-15% salary hikes for top management and 3-5% for middle management.
  17. 17.  http://help.vodafone.co.nz/app/answers/detail/a_id/2973/~/co mpany-restructuring%3F-need-to-amend-your-mobile- accounts%3F  http://www.telegeography.com/products/commsupdate/articles /2010/09/10/vodafone-group-unveils-corporate-restructuring- plans/  http://www.vodafone.com/content/annualreport/annual_report11 /business-review/people.html  http://www.vodafone.com/content/dam/vodafone/investors/financ ial_results_feeds/preliminary_results_31march2013/dl_prelim20 13.pdf

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