Arun Sarin is making a timely exit from Vodafone Group Plc. Two years ago, few would have believed the Indian-born chief executive of the mobile operator would survive long enough to depart under his own steam. Yet, Sarin is leaving Vodafone in glory after five years at the helm.
Sarin has chosen a good time to go. Vodafone’s business is strong operationally. It’s anticipating 12% organic revenue growth in the year ending March 2009, against the 4.3% delivered last year. That reflects a host of acquisitions, and blows the 2% growth of its European peers out of the water.
Strategically, Sarin also seems to have prevailed over the doubters who called for his head in 2006. Dissident investors demanded the sale of Vodafone’s 45% minority holding in Verizon Wireless Inc., its US joint venture.
Sarin may have been slow to act on the problems he inherited, but the big decisions he made look good. He did fail to takeover US rival AT&T Inc., but his other big US call—to hold on to its Verizon joint-venture stake—proved prescient. Analysts estimate the stake’s stand-alone value has since tripled.
Sarin’s most striking moves have been in emerging markets— acquisitions in India and Turkey. Fast-growing markets, including the US, contributed 19% of Vodafone’s fiscal 2008 sales and earnings before interest, taxes, depreciation and amortization.
Sarin leaves his chosen successor Vittorio Colao with some tough challenges. He faces a fight to keep up Vodafone’s momentum in highly competitive markets. Verizon Wireless isn’t paying a dividend, and it’s too early to tell how India and Turkey will play out. Vodafone shareholders will hope that Sarin has left on a high, but not at the top.