Vodafone CEO Exits as Fixed Broadband Grows to 382K UK Customers

The latest Q1 2018 (calendar) results from Vodafone UK reveal that their fixed line broadband base grew by +65,000 in the quarter to total 382,000 (up from +39K added in Q4 2017) and their 4G  mobile can now cover 99% of the UK population. Meanwhile the operator’s group CEO, Vittorio Colao, is to be replaced.

Vodafone now hails itself as the “fastest growing operator in the UK broadband market,” which is in no small part due to their aggressive pricing policy that has seen them position their superfast home broadband (FTTC ‘up to’ 38Mbps or 76Mbps) and phone bundles in a way that undercuts all of their primary rivals.

Over the past quarter the operator has also confirmed a number of additional cities as part of their deal with Cityfibre to potentially rollout a 1Gbps capable Fibre-to-the-Home (FTTH/P) broadband network for up to 5 million UK premises by 2025 (here).

Initially this deal will only seek to cover a “minimum” of 1 million homes in up to 12 of Cityfibre’s existing cities and towns by 2021 (extending to 5 million requires more investment – a decision on that will be taken later), which so far includes Milton Keynes, Aberdeen, Peterborough, Edinburgh, Coventry, Huddersfield and Stirling. This represents 500,000 premises passed (£315m of investment) and more cities will be confirmed soon.

Meanwhile Vodafone’s UK mobile customer base shrank by -94,000 in the quarter to total 17,515,000 and this compares poorly with a Q4 2017 loss of -25,000. On the financial side they reported annual UK service revenues of £6,094m (down from £6,632m last year) and adjusted operating profit of £168m (up sharply from -£542m last year).

The other big news today is that long time Vodafone Group CEO, Vittorio Colao, is to be replaced by their Group Chief Financial Officer (CFO), Nick Read, on 1st October 2018. Meanwhile the Group CFO role will go to Margherita Della Valle, who is currently the deputy CFO.

Gerard Kleisterlee, Vodafone Group Chairman, said:

“On behalf of the Board, I would like to express our gratitude to Vittorio for an outstanding tenure. He has been an exemplary leader and strategic visionary who has overseen a dramatic transformation of Vodafone into a global pacesetter in converged communications, ready for the Gigabit future. Vittorio will leave as his legacy a company of great integrity with strong inclusive values that is exceptionally well-positioned for the decade ahead.

Nick has been the co-architect of the Group’s strategy together with Vittorio, combining extensive international operational and commercial leadership with world-class financial acumen. I am confident Vodafone will benefit greatly from his experience, insight and wisdom in his new role as Group Chief Executive.

Margherita has a strong track record in financial leadership at the highest levels, and I am delighted to welcome her to the Board. I would also add that the appointment of Nick and Margherita serves as a testament to the strength and depth of the Vodafone senior leadership team that Vittorio has assembled and led over the last decade.”

A few other developments have also occurred since the last update. Vodafone has added a “speed guarantee” to their superfast broadband packages (here) and the group also agreed to acquire Liberty Global’s cable network operations in Germany, the Czech Republic, Hungary and Romania for an enterprise value of €18.4 billion. Liberty Global also owns Virgin Media in the UK but so far the two have not been able to reach a similar agreement.

Otherwise there’s not a lot else to highlight, although Vodafone did recently secure a 50MHz slice of the 5G friendly 3.4GHz mobile spectrum band as part of Ofcom’s recent auction. You can read the full results here.