Vodafone's Sarin on defensive as European plan shaken

Ahead of what promises to be a rollercoaster ride of a shareholder meeting Tuesday, Vodafone chief executive Arun Sarin today defended his position with the assertion that the company’s revenues are on track.

The operator reported 4.5 million proportionate organic net additions, with a further 11.7 million from the acquisition of Telsim in Turkey, taking the total proportionate customer base to 186.8 million at the end of June. 3G subscriptions also grew by 1.3 million during the quarter, with the group’s total 3G device base now at 9.1 million.

Non voice services as a percentage of revenue remained flat at 17 per cent – the same level it has been at since the start of the year. Data services contributed 4.9 per cent of revenues, while messaging continues to provide the bulk of non voice revenues at 12.5 per cent.

Group voice usage was also up slightly during the quarter, reaching a total of 51.388 million minutes at the end of June, compared to 48.15 million at the end of March. The biggest increase was recorded in the markets outside Europe where over a million voice minutes were added during the quarter.

Sarin said that Vodafone faced continuing intense competition across Europe during the quarter, a phenomenon which the operator plans to tackle through its reorganisation into three principal business units: Europe, EMAPA and New Businesses.

However, the new strategy took a knock today with the announcement that Bill Morrow, who was to head up the European unit, will depart Vodafone at the end of the month.

Morrow, who has previously held the positions of chief executive of Vodafone UK and most recently president of Vodafone Japan, cited family reasons for his departure.

Morrow will be succeeded, on an interim basis, by Fritz Joussen, currently chief executive of Vodafone’s business in Germany. An international search for a permanent successor for Morrow has started, the company said.

Sarin will likely now face new questions on the company’s European strategy at the shareholder meeting Tuesday, as well as criticism from stockholders. Last week it emerged that Morley Fund Management, which owns a 2.1 per cent stake in Vodafone is planning to vote against Sarin’s re-election to the board.