Sarin to bow out of vodafone: carrier's stake in vzw may be reconsidered | rcr wireless news

Vodafone Group plc will say goodbye to its fearless leader. After five years as CEO, Arun Sarin announced last week that he is retiring as head of one of the wireless industry’s largest

operators, and minority-interest holder in Verizon Wireless, at the end of July. Vittorio Colao will take his place; Colao has been with Vodafone for almost two years, coming on as head of

the carrier’s European business. Vodafone noted that during Sarin’s time as CEO the carrier has seen its prorated customer base grow from 120 million customers to 260 million customers

around the world and that the company’s return to shareholders has surged more than 400%. “It has been a privilege to lead Vodafone for the last five years and to have been involved in the

company for such a long time,” said Sarin in a prepared statement. “I feel that I have accomplished what I set out to achieve, particularly in developing and implementing a new strategy. I

am very proud of what Vodafone and its 71,000 people have achieved and the good momentum we have in the marketplace. 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.” VZW impact Few expect the change of leadership to have a significant

impact on Vodafone’s sometimes contentious 45% stake in Verizon Wireless. “It’s hard to say what Colao will do with the Verizon Wireless stake, but it seems that Vodafone has been happy with

the partnership as of late,” said Keith Mallinson of Wise Harbor. During Sarin’s tenure, Vodafone was presented with several put options in its agreement with majority stakeholder Verizon

Communications Inc. that would have forced Verizon to buy out Vodafone’s stake. Vodafone passed on enforcing those options. “I think the money wasn’t right in those deals to make it

worthwhile for Vodafone,” Mallinson said. “I think looking forward it would take an extraordinary opportunity to invest in another market for Vodafone to even think about exiting Verizon

Wireless. Vodafone’s shareholders are happy at the moment, so I don’t see any internal pressure on them to make a move.” High points Under Sarin’s watch, Vodafone expanded into several new

markets, including the acquisition of Hutchison Essar in India last year. Mallinson said that purchase might go down as Sarin’s most important deal. Vodafone also expanded into other

emerging markets during Sarin’s tenure, including Romania, the Czech Republic and Turkey. These deals were seen as strategic for Vodafone as its core markets in Europe have seen stagnant

growth over the last several years. The carrier also is facing increased government regulation on certain revenue streams like cross-country roaming charges. Challenges However, all was not

rosy under Sarin’s watch; Vodafone was forced to sell its operations in Japan to Softbank in early 2006 for $15 billion after failing to find a way to compete against larger competitors NTT

DoCoMo Inc. and KDDI Corp. Vodafone was also trumped in its pursuit of AT&T Wireless Services Inc. by Cingular Wireless L.L.C., which threw out a last-minute, $41 billion bid for the

carrier that just topped Vodafone’s $38 billion offer. Some still question whether Vodafone was really interested in acquiring 100% control of AWS at the expense of its minority stake in

Verizon Wireless or if the carrier was acting on behalf of Verizon in making sure that whoever acquired AWS paid a premium.