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Vodafone Group Plc Chief Executive Officer Nick Read will step down at the end of 2022, after he failed to halt a years-long slide in the telecommunication giant’s share price and mergers with major rivals failed to materialize.  

Chief Financial Officer Margherita Della Valle will do the job on an interim basis while the board, led by Chairman Jean-Francois van Boxmeer, seeks a replacement. Read, who’d been in the post for four years and at Vodafone for more than two decades, will stay on an as adviser until the end of March, the company said in a statement on Monday. 

“I agreed with the board that now is the right moment to hand over to a new leader who can build on Vodafone’s strengths and capture the significant opportunities ahead," Read, 58, said in the statement.

Vodafone’s share price has sunk about 44% since Read took over in October 2018. In that time the Newbury, England-based mobile and broadband giant has retrenched and cut debt. Read’s biggest move may have been to spin out and list the company’s tens of thousands of mobile masts, selling a stake in Frankfurt-listed listed Vantage Towers AG to a private equity consortium in a deal that valued the business €16.2 billion ($17.1 billion) last month. 

Still, Read struggled to finalize deals that would have reduced the number of players in some of Vodafone’s biggest markets such as the UK, Italy and Spain. An approach for the Italian business was rebuffed, a key merger opportunity in Spain was missed, and talks with UK rival Three, owned by CK Hutchison Holdings Ltd., are public but have yet to conclude. Vodafone shares were little changed at 12:39 p.m. in London trading. The stock remains close to 25-year lows. 

Vodafone’s share price has underperformed the rest of the industry this year, even as the sector lost value as a whole, falling more than the Stoxx Europe 600 Telecommunications Price Index.

Its challenges deepened in 2022 after Russia’s invasion of Ukraine sent energy costs soaring, while interest rates also rose. Read faced pressure from investors including Europe’s largest activist fund Cevian Capital AB, which sold much of its stake earlier this year. 

More recently, a vehicle backed by French billionaire Xavier Niel bought 2.5% of Vodafone saying it saw opportunities to accelerate deals and improve profits.

Although major issues like energy prices and coronavirus were outside of Read’s control, analysts pointed to how he’d handled others. In 2019, he cut the dividend six months after the company said it was affordable.

Earlier this year, he missed the company’s biggest opportunity yet to merge its embattled and shrinking Spanish division. And he’s acknowledged poor performance in Vodafone’s biggest business, Germany, following an €18.4 billion deal early in Read’s tenure. The acquisition, which included some eastern European businesses, was originally struck by his predecessor, Vittorio Colao.A new CEO will have to address the commercial issues in Germany, and cost-of-living concerns across Vodafone’s footprint, which could undermine support for “market repair," which might include price rises or mergers, Jefferies analyst Jerry Dellis said in a note to clients. 

Dellis added that leverage remains “uncomfortably high" after the Vantage deal and that the dividend policy should be treated as under review.

Vodafone’s operations are complex and it’s never appointed a complete outsider to the top job, so Read’s successor may already have some link with the company, Berenberg analyst Carl Murdock-Smith said in a note following the announcement. 

He pointed to Informa Plc CEO Stephen Carter, who serves on Vodafone’s board and was previously head of UK telecom regulator Ofcom, and Nick Jeffery, who was previously Vodafone’s UK head and left the company last year to run US-based Frontier Communications. 

Carter and Jeffery didn’t immediately respond to requests for comment. 

Other contenders mentioned by analysts include new interim chief Della Valle, who has implemented significant cost cuts as CFO. There isn’t a clear internal successor, analysts at Bernstein said.

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