Vodafone under the command of Colao can only be good news

Implications: When Colao left McKinsey to help run Omnitel as the COO he showed that he was more that a "Strategy Man" working alongside Francesco Ciao he showed that he was someone vary capable at Operational matters.  With Cioa gone, he steppped up to the CEO role and integrated the Omnitel into Vodafone. On his return to Vodafone he has spent the last 18 months getting ready to succeed Sarin by Optimising the network. Now with an Italian at the head you can expect to see Emerging Markets take a back seat as he follows the startegy of the Spanish Subsiduary and stimulates the market.

Analysis: Colao is someone who has Operational Experience of a level not usually seen in a CEO of a truly International Business.  He has a technical knowledge that makes it difficult for the Country Managers to hide.  He has the skills to streamline costs whilst still innovating products.

On his return in October 2006 he immediately addressed the cost base.  He informed Executives that they had a budget for a reason and that they were expected to live within their means.  He then set about taking down some of the Empires that were built at the time of Sarin's appointment.  He has invested wisely in an expansion of the ERP systems and restructured the IT structure so that at last the Executive have visability at a level not before achieved.

I am sure that he has plans for the first few days in the CEO role that will set the tone for the future.  I expect he to grasp the hard task of underperformance in the Emerging Markets.  Turkey has not performed as expected and he will seek measures that fix the Operation.  In the Emerging Market you have to remember that most of the network is powered with oil and the price has risen significantly.  Not only are the costs rising but also the income as consumers has less to spend because of risng prices of oil and food.  Colao has already started to address costs by changing they way that the network is cooled, and is looking if the network needs to be "on" 24/7.

Within the Big Five markets in Europe he will seek to resolve ownership in France. He is looking to offshore some of the transactional processes not to India but rather to Central Europe.  With Bond as Chairman you have tow Executives who believe in Insourcing rather than Offsoring.  It will be Centralised to two core data centres in Germany and Italy. His replacement as CEO Europe will be the current head of Spain who has been the Star performer over the last few years.  With him in charge you can expect to see Vodafone look at simple measures aimed at lifting useage of Voice and better customer segmentation.

On a Global level the new Vodafone Enterprise Services business will offer more than simple connectivity for Fortune 1000 businesses.  What you can expect to see is a business that operates in a similar manner to BT Global Services with revenues goming not from selling SIMs but rather providing solutions that lift operational efficency.

Vodafone will start to work on tools that improve the OSS and BSS in the businesses.  They are installing software from Aperto that allows them to serve dynamic adverts on the Live! platform without the need for Google.  Something that they are already doning in the UK now.  Other users of the software have focused on device management which have lowered the level of calls to Customer Service by 8%.

The other great news is that Vodafone will use Consultants in a more tactical basis.  As a former Partner of McKinsey he understands the value of using such services and knows the business model that they deploy.  Colao will be a nasty buyer of such services.  He will however use Game Theory to make sure that any new direction Vodafone make will be well planned.