Sarin said this morning that he will stand down as Vodafone chief executive at the end of July, to be replaced by his deputy Vittorio Colao. Sarin said it had been ‘a privilege’ to run Vodafone for the last five years, but apparently feels he has: ‘accomplished what I set out to achieve, particularly in developing and implementing a new strategy’.
He’s certainly going out on a high – Vodafone said today that annual group revenues were up 14% to £36bn, while pre-tax earnings jumped 10% to more than £13bn. And Sarin’s last big deal seems to be going great guns – revenues were up 50% in India, following last year’s £5.7bn acquisition of a controlling stake in Hutchison Essar. Bonus.
It’s all a far cry from the dark days of 2006, when Sarin came in serious danger of getting the boot from the mobile operator. His appointment in 2003 to replace Sir Christopher Gent, architect of the takeovers that made Vodafone into a global giant, met with a muted response from the City – and his strategy in the US (where he abandoned a takeover of AT&T Wireless and refused to sell out of Verizon) coupled with flagging growth in Europe and expensive acquisitions overseas only strengthened the dissenting voices. In 2006 about 15% of shareholders either abstained or voted against him continuing as CEO.
However, in the last two years Sarin has well and truly won over the City – particularly by his focus on emerging markets. His deal to buy Turkish operator Telsim may have been expensive but it prevented rivals getting a foothold in this huge market (‘If you’re not doing [interesting things], someone else is eating your lunch’, he told MT in 2006), while the Hutchison Essar acquisition has also paid dividends. He’s even turned things around in the saturated European markets – he might not be able to sell lots more mobile phones, but he’s been able to cut costs and expand into other areas (like broadband).
As the man who has overseen this tricky task, European boss Colao was the obvious choice to take over as CEO (so obvious, in fact, that it’s been praised as a textbook example of succession planning; Marks & Spencer take note). But he’s got a tough job on his hands – as well as filling Sarin’s sizeable shoes, he’s also going to be operating in a difficult economic climate. Sarin, meanwhile, is retiring on his own terms while his stock remains high – allowing him to take a comfortable sinecure with some fabulously-rich private equity firm, no doubt.
Still, after five years of grappling with shareholders, battling ambitious rivals and confounding critics in one of the most competitive business markets, we suppose he’s probably earned it…
Click HERE to read MT’s exclusive interview with Arun Sarin in 2006.