Vodafone chief quits with £1m pay-off

Thomas Geitner, the head of Vodafone's New Business and Innovation operations, will leave the company in December with a pay-off of more than £1m after the mobile phone giant unexpectedly axed his division.

Vodafone's decision to reintegrate its New Business division into its group strategy and global marketing functions comes just six months after it was established. The New Business and Innovation division was created in April to target new revenue streams derived from services such as broadband internet, voice over IP and mobile advertising.

One analyst said the decision to unravel the new business "smacked of indecision". Another analyst said: "It's incredible that a company like Vodafone can rejig its organisational structure twice in six months."

A Vodafone spokesman dismissed concerns that the move represented a reversal of the growth strategy put forward by its chief executive, Arun Sarin. He said that the company wants to accelerate that plan by moving the deployment of new services back into its marketing and strategy functions.

Mr Geitner is the second divisional head to leave Vodafone since the company was reorganised after Bill Morrow quit as head of its European division in July and the sixth board member to stand down since March.

His departure has led to speculation of further ructions in the boardroom. Vittorio Colao, considered an heir apparent to the embattled Mr Sarin, rejoined Vodafone on Monday as head of its European division. He will in effect take control of Mr Geitner's duties as Vodafone's European subsidiaries will take charge of New Business and Innovation.

The fact that Mr Geitner will stay on until December and work with Mr Colao, who also joined the company in 2000 as part of the Mannesmann deal, soothed fears of further boardroom tension. Robert Grindle, an analyst with Dresdner Kleinwort, said: "I would be surprised if this reshuffle is to do with personality clashes. It looks more like an example of the company trying to make itself more nimble."

The New Business and Innovation division was established when Vodafone split into three units to address the different challenges it faces in mature European markets, emerging markets and in driving new revenue streams. Mr Geitner moved from his role as chief technology officer to run the division.

He was considered one of the old guard, having been with the mobile operator since 2000, when the British company acquired German operator Mannesmann. He received £734,000 in basic salary last year and received almost £1m in bonus payments and benefits.

The reintegration move is the latest in a series of actions by Vodafone to rationalise its cost base. It recently announced that it will outsource some IT functions to IBM and EDS and this week signed an exclusive deal with retailer Phones4U in the UK to sell its contracts in order to lower third-party sales costs.