Speculation over the future of Vodafone intensified on Monday after Sir Christopher Gent resigned as life president amid allegations that he been part of a conspiracy to remove chief executive Arun Sarin.
Gent, Sarin's predecessor as chief executive, resigned from Vodafone on Sunday evening. This followed weeks of rumours that some members of the Vodafone board were plotting to remove Sarin — which Gent insisted were "without foundation".
Analysts warned that Vodafone is poised at a very important point in its history. With chairman Lord MacLaurin also leaving in the summer to be replaced by Sir John Bond of HSBC, it may be time for the company to consider appointing someone from outside the mobile world.
Vodafone could even look to purchase a fixed-line company such as BT, analysts said.
"Vodafone painted themselves into a corner with their mobile-only strategy," said Dean Bubley of Disruptive Analysis. "I think they should buy BT — this gives them a platform for future growth. But if they are going to do it, they must do it quickly — they need to do it before everybody starts implementing their core strategies. We know that BT is a candidate for private equity and Vodafone needs a fixed voice and data strategy."
Earlier this month, BT's shares rose by five percent in one day as a result of speculation that the telco could be the subject of a £20bn takeover bid. According to reports at that time, a number of global private equity firms had been examining BT as a potential bid target for a deal which at upwards of £20bn, which would easily be the biggest ever takeover of a British company.
Vodafone is currently valued at around £75bn, but management at the company have repeatedly warned that, based on assets, the company may be over-valued by anything up to £20bn.
Vodafone has no major fixed-line assets and has focused its strategy on expanding in the mobile field, with a major shareholding in the US mobile firm, Verizon. On Sunday, that strategy came once again under scrutiny as UK newspaper The Business reported that Verizon had made an informal approach to Vodafone of around $40bn (£23bn) for its 45 percent stake in their Verizon Wireless joint venture.
"We have made our interest in acquiring Vodafone's stake in Verizon Wireless clear," a Verizon source told the newspaper. "The ball is now in Vodafone's court."
According to Bubley, buying a share in Verizon was exactly the wrong thing for Vodafone to do. "The future is in other markets like China, or even Japan. Verizon sits very uncomfortably there."
But Bubley believes that makes Vodafone's next moves all the more important. "Sarin is a mobile man, he comes from the world of mobile. The problem with people who spend that much time in mobile-land is that sometimes there is the hint of the ostrich about them. They think that to be any good, something has to be mobile and that may not be the right attitude at this time."
Tony Lock, chief analyst at Bloor Research, agrees that Gent's sudden departure takes place at a challenging time for Vodafone. "A lot depends on who replaces him on the board"," he told ZDNet UK. "But not so much who it is but what kind of person they are. Is it someone hands-on, or someone who is going to be right for the City. In the medium and longer term, that becomes more important."
Lock also believes that the most important issue for the company will be how it deals with the convergence issue. "The convergence of mobile and fixed-line and the whole issue around IP is crucial," he said. "Shareholders and customers will need to know how a new chairman plans to deal with those issues."
As for Gent himself, Lock believes that he will find a future outside of the company he founded. "It wouldn't surprise me at all to see him turn up somewhere and soon."
Like Bubley, Lock believes that the departure of Gent will make little difference to Vodafone in the short term. "Customers don't notice or care about these things," he said. "In the medium to longer term and especially among the larger customers you will see some concern. The issues around where Vodafone goes next need to be sorted out. People will want to know."