James Moore: More needed for Vodafone to be throned

Outlook There's something not quite right about describing Vodafone, that British corporate titan, as a straggler. But that's exactly what it will be when the merger of T Mobile and Orange completes, at least in its home market where it will drop from second to third place in the rankings.

The only remaining mobile major still in British hands missed out on the iPhone not once but twice. Blackberry Storms are poor consolation. It is perceived in some quarters as expensive. Its marketing also seems to have lagged behind its rivals, particularly O2, now part of Telefonica, whose bubbles are everywhere. Brand watchers coo over the innovations of O2, but Voders seems tired and pedestrian by comparison.

In corporate terms, the chief executive, Vittorio Colao, was talking tough yesterday, promising that the company was going to raise its game.

And so because the target of cutting costs by a billion by 2010 will be achieved in the current year (funny how these corporate cost-cutting targets are always, but always, exceeded) there'll be another billion to come over the next two years (no doubt that will be exceeded too, and there'll be bonuses all round for beating the "stretching" target).

Investors will probably welcome the move. Pay-offs are required from all the wheeling and dealing that built the company into what it is. But some of those savings may be used for yet more deals, and much of the rest is being earmarked for investment in new services. They will be necessary. Vodafone is still an astonishingly successful, profitable, company. But it no longer seems to have the X factor. More is needed from Mr Colao to restore his company as the king in its own castle before it conquers the world again.