Page last updated at 16:42 GMT, Tuesday, 27 May 2008 17:42 UK

Shock departure for Vodafone boss

Arun Sarin spoke to the BBC in April about the future of the company

Vodafone chief executive Arun Sarin is stepping down from his post as the head of one of Britain's biggest companies after five years, the company has said.

In a surprise move, he will retire at the end of July and be succeeded by his deputy Vittorio Colao.

The news came as Vodafone unveiled annual pre-tax profits up 2% to 8.9bn.

Mr Sarin had built a good reputation in the City after a difficult period in 2006 when he faced a shareholder revolt and his performance was criticised.

That year, Vodafone made a loss of 14.9bn - a record for a UK firm - after it had to significantly reduce the value of its assets, including German telecoms firm Mannesmann, which it had bought in 2000. Recovery

Vodafone share price July 2003-May 2008.

Mr Sarin's back was "against the wall" in 2006, when about 15% of shareholders either abstained or voted against him continuing as chief executive, according to Richard Hunter, from stockbrokers Hargreaves Lansdown.

However, he "has managed to turn that tanker around in recent years", Mr Hunter said.

"I feel that I have accomplished what I set out to achieve, particularly in developing and implementing a new strategy," said Mr Sarin in a statement.

The firm's shares have risen 38% since Mr Sarin was appointed in July 2003.

The new strategy has mainly involved expanding operations in emerging markets.

The annual results showed its revenue in India had jumped by 50%, making up for "challenging" conditions in Europe, where pressure from competitors and regulators had pushed prices down by 15.8%.

Arun Sarin's CV
1975: Graduated as Bachelor of Science in Engineering, Indian Institute of Technology
1978: Gained MBA, University of California, Berkeley
1984: Joined Pacific Telesis Group
1999: Joined Vodafone's board when it bought US mobile firm AirTouch Communications
2000: Appointed chief executive of Vodafone AirTouch US & Asia Pacific regions
2003: Appointed Vodafone chief executive
2006: Survived shareholder revolt
2008: Mr Sarin to retire at end of July

"He started buying companies in developing markets, like India's fourth biggest mobile phone company Hutchison Essar.

These are markets where you'll get growth because penetration is low and you can sign up new subscribers," said Neil McCartney, analyst at McCartney Media.

"The other thing he did was move away from Vodafone's traditional stance of being a mobile only company by offering fixed line services," Mr McCartney added.

Succession

Vodafone chairman Sir John Bond led to the tributes to his outgoing chief executive, saying Mr Sarin had led the company "with distinction".

The news that he will be succeeded by his deputy Vittorio Colao will be welcomed by the City, according to Mr Hunter.

"The fact that his number two should be able to slip into his shoes will go down well in terms of succession planning," he said.

Vittorio Colao was tipped to take over the top job at Vodafone from Sir Christopher Gent in 2003, but was beaten to the post by Arun Sarin.

Since his appointment as deputy chief executive in 2006, 46-year-old Mr Colao has run Vodafone's European operations.

During his career, he has worked for investment bank Morgan Stanley, consultants McKinsey & Co and the Milan-based RCS MediaGroup.

Looking ahead, analysts say a move to new markets, such as entertainment, is something the new boss might well consider.

For instance, France Telecom has launched a "triple-play" strategy combining television, internet and telephone services.

"Growth is in the home broadband and TV markets and, unlike its European rivals like France Telecom and Telefonica, Vodafone is missing home TV," said John Delaney from consultancy IDC.

Shares in the firm closed down 1.7% at 160.5p.




SEE ALSO
Vodafone upbeat as profits rise
13 Nov 07 |  Business
Vodafone sees no sign of slowdown
31 Jan 08 |  Business
Vodafone's full-year profit dips
29 May 07 |  Business
Vodafone lures Colao back to fold
05 Sep 06 |  Business
Vodafone AGM backs Sarin in vote
25 Jul 06 |  Business

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