Sarin Steps Down as Vodafone CEO

Arun Sarin is stepping down as CEO of Vodafone Group plc (NYSE: VOD) after five sometimes tricky years of portfolio restructuring and service strategy evolution that has turned the mobile giant into a significant emerging markets player and wireless data services provider. (See Vodafone Names New CEO.)

The news that Sarin, who took over from Chris Gent in July 2003, will be succeeded by his current deputy CEO Vittorio Colao comes as the mobile giant, which has 260 million customers worldwide, announces full-year revenues of £35.5 billion ($70.1 billion), up 14.1 percent from a year earlier. Discounting the impact of acquisitions, the operator's full-year revenues have grown by 4.2 percent on a like-for-like basis. (See Vodafone Reports Full Year and Gent's Last 3G Stand.)

Full-year profit is £6.6 billion ($13.1 billion), up nearly 7 percent compared with fiscal 2007, and the outlook for the current financial year to the end of March 2009 is for further growth in revenues and profits.

"What has turned out to be CEO Arun Sarin's final set of results has delivered," stated the analyst team at Dresdner Kleinwort in a research note.

And Heavy Reading wireless analyst Gabriel Brown believes Sarin has, overall, "done a good job in the circumstances. He has cleared up the acquisitions made by Chris Gent [the previous CEO] and developed a big growth story in the emerging markets. He'll be missed, I think, despite the flack he's taken."

And Sarin has certainly taken some flak as he has executed his group operator portfolio strategy that has involved: divesting minority stakes in international carriers, with the notable exception of the lucrative 45 percent holding in Verizon Wireless ; selling off operations in mature markets such as Japan; acquiring fixed line broadband operations to further a combined fixed/wireless broadband service strategy; brokering infrastructure-sharing deals with rivals; buying into the so-called "emerging markets" (such as India) in which nearly every carrier with deep pockets is now investing; focusing on data services and Web-based applications; and putting Vodafone at the forefront of the sector's push towards 4G.

For details, see: Sarin's strategy, and in particular his decision to hold onto Vodafone's stake in Verizon Wireless, generated particular heat from some investors, with some demanding his removal, but he toughed it out and, if anything, has strengthened the ties with the U.S. mobile operator. (See Vodafone CEO Faces Showdown, Sarin Survives, Vodafone Hangs On to Verizon Stake, V'fone Investors Reject Efficient Demands, Vodafone Holds On to Verizon Stake, and Verizon, Vodafone Head for LTE.)

Sarin noted today that the Verizon Wireless stake was a strong contributor to the company's full-year profits, and that Vodafone remains "committed to our investment in Verizon Wireless, which continues to perform very well on all key metrics."

Now Colao will pick up the baton and continue the carrier's evolution into a global broadband player focused on data services. And the signs are that the company is heading in the right direction: Vodafone's revenues from data services in the past financial year were up nearly 53 percent to £2.2 billion ($4.35 billion), with the company noting late last year a strong uptake of its data services in the strategically important enterprise market. (See Enterprise Data Drives Vodafone.)

In his last CEO's statement today, Sarin noted that Vodafone's investment in 3G, which offers up to 3.6 Mbit/s downlink speeds, is driving that data growth, and that the carrier will, before the end of 2008, "begin to offer 14.4 Mbit/s, which will provide a compelling alternative to fixed broadband for many customers."

— Ray Le Maistre, International News Editor, Light Reading

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