Vodafone ‘may move HQ out of UK’ after EU vote
29 June 2016 | Alan Burkitt-Gray
Vodafone is expected to move its public policy operations from London to Brussels in the wake of last week’s UK vote to leave the European Union and may even move its headquarters out of the UK.
The company said in a statement that the UK accounts for only 11% of group earnings, while other European businesses account for 55%.
“The UK’s membership of the European Union has been an important factor in the growth of a company such as Vodafone. Freedom of movement of people, capital and goods are integral to the operation of any pan-European business as are single legal frameworks spanning all member states.”
However the company is known to feel that if the UK leaves the 28-nation EU then the right place to negotiate with the union of the other 27 nations will be Brussels.
This is particularly timely as the European Commission, the EU executive arm, is in the process of implementing the digital single market, which would allow service providers and content owners to operate across the EU.
It is important to Vodafone to be supportive of the EU and the digital single market, according to people informed of the company’s feelings, and the company does not want to “face being locked out of the room” as a UK-based operation.
But while negotiating and lobbying teams are likely to move soon to Brussels, no decision has yet been taken about moving the headquarters out of the UK. Vodafone was founded as a UK mobile operator in 1985 and since then has grown to become the biggest global mobile operator. It is second only in subscriber numbers to China Mobile, almost all of whose customers are in China.
“We will continue to evaluate the situation and will take whatever decisions are appropriate in the interests of our customers, shareholders and employees,” said the company in a prepared statement.
The company is known to have three main criteria by which it will take its headquarters decision: the free movement of goods between the UK and the EU; the ability to move people into and out of the UK, including on short-term projects; and the ability to move capital in and out daily.
Of the main management team of Vodafone, the CEO, Vittorio Colao, is Italian; the CFO, Nick Read, in British; and the CTO, Johan Wibergh, is Swedish. The chairman, Gerard Kleisterlee, is Dutch.
The UK is still important to Vodafone, the company makes clear, and it has no plans to dispose of its retail operations in the UK – but it is also clear that once the direction of the UK government’s negotiations become clearer, the company will consider where is the best place for the headquarters.
The two clearest options would be Düsseldorf or Milan, where the German and Italian operations are based respectively. But it is equally possible that the company would consider one of the other EU members where the company has a network, including Ireland, which would probably have tax advantages, or the Netherlands.
Vodafone employs 13,000 people in the UK. It began in Newbury, Berkshire, where it still has a huge operation, but its headquarters are now in central London. The company has 97,000 employees in the rest of the world.