Mr Colao quit the firm in 2004 for Italy's RCS Media Group
Vodafone has brought former executive Vittorio Colao back into the fold as its deputy chief executive.
News of the appointment has sparked speculation that the mobile phone giant may be paving the way to replace current chief executive Arun Sarin.
Mr Colao was once seen as a front-runner to lead the firm, before he was beaten to the post by Mr Sarin.
As well as being Mr Sarin's deputy, Mr Colao will also take charge of Vodafone's European operations.
Mr Colao quit the firm in 2004 to take over the chief executive post at Italian publishing firm RCS MediaGroup.
"I am delighted to welcome Vittorio back to Vodafone in such an important role in my senior management team," said Mr Sarin.
"We have a number of major challenges and opportunities in our European region and I am confident that, given his background and experience, Vittorio is well equipped to succeed in this key position."
However, the appointment has done little to calm talk about the possible departure of Mr Sarin.
"It's a good appointment. Colao's well respected. But this is bound to increase speculation that they're preparing for a replacement to Sarin," said Colin Morton of Rensburg Fund Management.
At Vodafone's annual general meeting in July this year, Mr Sarin won a vote of support, surviving calls from some shareholders for him to stand down.
Some investors are said to be unhappy about the way Vodafone has communicated its strategy to the market and the poor performance of the phone firm's shares.
Shares in the world's biggest mobile phone company by sales have fallen by almost 25% over the past year.
In May, Vodafone revealed that it had made a record £14.9bn loss after it made major write-downs in the values of some of its assets.