Sarin has crowned Vodafone with Indian jewel
Italian Vittorio Colao, who on Tuesday was named as the chief executive of Vodafone, is likely to take over as the vice-chairman of the company’s Indian arm-Vodafone Essar. Vodafone CEO Arun Sarin, who will relinquish the post in July 2008, has ...
NEW DELHI/KOLKATA: Italian Vittorio Colao, who on Tuesday was named as the chief executive of Vodafone, is likely to take over as the vice-chairman of the company���s Indian arm���Vodafone Essar. Vodafone CEO Arun Sarin, who will relinquish the post in July 2008, has been the vice- chairman of the Indian arm ever since the global telecom major acquired a controlling stake in the company in February, 2007.
Sources in Vodafone Essar said that there would be no impact on company���s Indian operations following Sarin���s decision to step down. ���We expect complete continuity and a non-disruptive transition, especially since Mr Vittorio Colao has been part of Vodafone Essar���s management team as a board member shortly after Vodafone acquired a controlling interest in the erstwhile Hutch Essar last year,��� said a source.
While Mr Colao is tipped to be the favourite, an alternative internal candidate for vice-chairmanship of Vodafone Essar could be Paul Donovan, who heads Vodafone���s emerging markets operations, a source told the media.
Vodafone���s entry into India was driven by Mr Sarin. In October 2005, Vodafone made its foray into India by picking up a 10% stake in Bharti for $1.5 billion. The move also marked the beginning of a ���special��� relationship that Mr Sarin shares with Bharti Airtel chairman Sunil Mittal. ���He is a great professional and friend. He has had a spectacular stint at Vodafone. He has made every Indian proud. I wish him the best in his future endeavors,��� Mr Mittal told ET.
But it was last year that Mr Sarin achieved his ambition of gaining control over an India company. Despite severe criticism and near shareholders revolt, Mr Sarin held on and went all out to acquire a controlling stake in Hutchison Essar in February 2007, a move that marked a shift in the company���s strategy to expand into high-growth emerging markets, especially in the aftermath of the tardy growth levels in Europe. Mr Sarin personally intervened to ensure that the Vodafone Essar got the requisite regulatory clearances from the Indian government.
This move has paid rich dividends and on Tuesday several brokerage houses and analysts put out reports stating that Indian deal was a turning point in Vodafone���s history as it marked a transformation in the telco���s approach to exit saturated markets such as Japan, Sweden and Switzerland, cut costs heavily in mature markets like Europe and chase growth in emerging markets. Under Mr Sarin, Vodafone���s customer base more than doubled. From about a 100 million subscribers when he became CEO in August 2003, the telco now has a customer base of 260 million, while its market cap went up from ��78 billion to ��86 billion during the last five years.
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Vodafone Essar has close to 46 million cellular subscribers across 16 territories. Armed with recent 2G start-up spectrum allocations from DoT, Vodafone Essar Spacetel (a wholly owned subsidiary of Vodafone Essar) is poised to splurge Rs 2000 crore in rolling out cellular services in Bihar, Orissa, Madhya Pradesh, Assam and Northeast. Despite his announcement to step down, indications are Mr Sarin, who was born in Panch Marhi in MP, will be fly down to India to flag off the Vodafone Essar Spacetel���s GSM services in his home state.Start a SIP with as low as ₹500 with ET Money App!
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