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27th May 2008, 07:56 AM
Announced today
Arun Sarin today said he was stepping down as chief executive of Vodafone after five years at the helm of the telecoms giant.
The Indian-born executive, 53, is to hand over the reins of the worlds biggest mobile phone company by market value to Vittorio Calao, who runs Vodafones European operations, in July.
He said: "I feel that I have accomplished what I set out to achieve, particularly in developing and implementing a new strategy...I know that the business is in capable hands with Vittorio Colao. Having worked with him for many years I know that he has the experience and vision to take Vodafone on to future success."
Rumours over his resignation have circulated for the past year, reigniting a few weeks ago, with Mr Colao, his deputy chief executive, widely predicted to take his place.
RELATED LINKS
Vodafone eyes £20bn MTN mobile bid
Vodafone targets social networking fans
Vodafone up on talk of early succession
Mr Sarin battled a shareholder revolt two years ago when more than 10 per cent of his investors voted against his re-election to the board, accusing him of being too quick to spend millions of pounds on foreign acquisitions. He also faced opposition on his board from those who backed the strategy of his predeccessor Sir Christopher Gent and disliked Mr Sarin's strategy of selling off the Japan business and well as those in Sweden, Switzerland and Belgium.
Today the Vodafone chief announced record full-year operating profit of £10 billion, with pre-tax profit of £9 billion compared to a £4.8 billion loss last time. However, free cash flow weakened from £6.1 billion to £5.5 billion and net debt shot up from £15 billion to £25 billion.
The surge in Vodafones profits and its growing debts have been fuelled by the groups expansion in emerging markets, particularly in India, thanks to last years acquisition of Hutchinson Essar there, steered by Mr Sarin.
Analysts said that todays results vindicated Mr Sarins position after the unrest two years ago.
Sources close to Mr Sarin, 53, believe that he could be eyeing a position in the world of private equity.
Mr Sarin, who replaced Sir Christopher Gent at the head of Vodafone in 2003, began his career in telecoms almost 25 years ago.
His career has included a stint with Pacific Telesis Group in San Francisco, after which he joined its subsidary AirTouch as chief operating officer.
When AirTouch was taken over by Vodafone, Mr Sarin became chief executive of the US and Asia-Pacific operations, also joining Vodafones main board. Mr Sarin was appointed chief executive of Vodafone at a time when the investment community wanted the company to concentrate on managing its businesses efficiently and returning cash to shareholders, after its dramatic takeover-driven expansion between 1999 and 2002.
After the groups shares flatlined and fell by 1.5 per cent in 2006, they have risen 14.06 per cent to 163.3p in the past year, giving a market capitalisation of almost £87 billion..
As well as success in emerging markets, Mr Sarin has also seen revenues rise thanks to data traffic. Last year revenues from this area the downloading of music clips, e-mailing and so on surged nearly 50 per cent in the first half to £1 billion. Data revenues now account for 7.3 per cent of the groups total Western European revenues.
The improvement does little, however, to justify the £6 billion splashed out by the group on it 3G licence during frenzied bidding at the height of the dot-com boom.
During his five years he has turned around Vodafones prospects, giving an indication that consumers are finally banishing their reluctance to spend on more lucrative services instead of just calling and texting.
In the current environment the groups diversified geographic portfolio and, critically, its exposure to markets outside the UK and the US are a big plus. Although a foothold in such markets does not come cheap it spent $11.1 billion (£5.7 billion) for a 67 per cent stake in Hutchison Essar, Indias fourth-biggest mobile operator, last year Vodafone has presented sound evidence of a good payback.
Recently Vodafone looked into buying MTN, the South African mobile phone operator, but backed out.
At the end of last year Vodafones £5 billion bid to extend its half share of Vodacom, another South African mobile operator collapsed. Telkom, with which it co-owns Vodacom, called off talks after several months.
Mr Sarin has also served as a director of Gap, the retailer, of Charles Schwab and of Cisco Systems. In 2005 he was appointed a non-executive director of the Bank of England.
Arun Sarin today said he was stepping down as chief executive of Vodafone after five years at the helm of the telecoms giant.
The Indian-born executive, 53, is to hand over the reins of the worlds biggest mobile phone company by market value to Vittorio Calao, who runs Vodafones European operations, in July.
He said: "I feel that I have accomplished what I set out to achieve, particularly in developing and implementing a new strategy...I know that the business is in capable hands with Vittorio Colao. Having worked with him for many years I know that he has the experience and vision to take Vodafone on to future success."
Rumours over his resignation have circulated for the past year, reigniting a few weeks ago, with Mr Colao, his deputy chief executive, widely predicted to take his place.
RELATED LINKS
Vodafone eyes £20bn MTN mobile bid
Vodafone targets social networking fans
Vodafone up on talk of early succession
Mr Sarin battled a shareholder revolt two years ago when more than 10 per cent of his investors voted against his re-election to the board, accusing him of being too quick to spend millions of pounds on foreign acquisitions. He also faced opposition on his board from those who backed the strategy of his predeccessor Sir Christopher Gent and disliked Mr Sarin's strategy of selling off the Japan business and well as those in Sweden, Switzerland and Belgium.
Today the Vodafone chief announced record full-year operating profit of £10 billion, with pre-tax profit of £9 billion compared to a £4.8 billion loss last time. However, free cash flow weakened from £6.1 billion to £5.5 billion and net debt shot up from £15 billion to £25 billion.
The surge in Vodafones profits and its growing debts have been fuelled by the groups expansion in emerging markets, particularly in India, thanks to last years acquisition of Hutchinson Essar there, steered by Mr Sarin.
Analysts said that todays results vindicated Mr Sarins position after the unrest two years ago.
Sources close to Mr Sarin, 53, believe that he could be eyeing a position in the world of private equity.
Mr Sarin, who replaced Sir Christopher Gent at the head of Vodafone in 2003, began his career in telecoms almost 25 years ago.
His career has included a stint with Pacific Telesis Group in San Francisco, after which he joined its subsidary AirTouch as chief operating officer.
When AirTouch was taken over by Vodafone, Mr Sarin became chief executive of the US and Asia-Pacific operations, also joining Vodafones main board. Mr Sarin was appointed chief executive of Vodafone at a time when the investment community wanted the company to concentrate on managing its businesses efficiently and returning cash to shareholders, after its dramatic takeover-driven expansion between 1999 and 2002.
After the groups shares flatlined and fell by 1.5 per cent in 2006, they have risen 14.06 per cent to 163.3p in the past year, giving a market capitalisation of almost £87 billion..
As well as success in emerging markets, Mr Sarin has also seen revenues rise thanks to data traffic. Last year revenues from this area the downloading of music clips, e-mailing and so on surged nearly 50 per cent in the first half to £1 billion. Data revenues now account for 7.3 per cent of the groups total Western European revenues.
The improvement does little, however, to justify the £6 billion splashed out by the group on it 3G licence during frenzied bidding at the height of the dot-com boom.
During his five years he has turned around Vodafones prospects, giving an indication that consumers are finally banishing their reluctance to spend on more lucrative services instead of just calling and texting.
In the current environment the groups diversified geographic portfolio and, critically, its exposure to markets outside the UK and the US are a big plus. Although a foothold in such markets does not come cheap it spent $11.1 billion (£5.7 billion) for a 67 per cent stake in Hutchison Essar, Indias fourth-biggest mobile operator, last year Vodafone has presented sound evidence of a good payback.
Recently Vodafone looked into buying MTN, the South African mobile phone operator, but backed out.
At the end of last year Vodafones £5 billion bid to extend its half share of Vodacom, another South African mobile operator collapsed. Telkom, with which it co-owns Vodacom, called off talks after several months.
Mr Sarin has also served as a director of Gap, the retailer, of Charles Schwab and of Cisco Systems. In 2005 he was appointed a non-executive director of the Bank of England.