Arun Sarin, Vodafone chief executive has been dealt a severe blow by the departure of European chief Bill Morrow just three months in the job.
During the boardroom coup that erupted earlier this year Morrow was perceived to be a Sarin loyalist. Sarin came out triumphant after appointing Morrow as chief executive of Western Europe. Sarin denied that Morrow’s departure was in any way connected with the disputes earlier this year.
Morrow is due to step down within the week and head back to the US for “an urgent family issue”. Morrow was previously head of Vodafone’s Japanese business, he also had roles in the UK and Belgium. The globetrotting position had taken a “serious toll on him and his family”, according to Sarin.
Fritz Joussen, who currently heads Vodafone’s business in Germany.will succeed Morrow until a replacement is found.
As the Vodafone share price has weakened, Sarin’s position has become shaky, to the point where both Hermes Pensions Management and Morley Fund Management are voted against Sarin’s reappointment at the annual meeting.
The board faced almost an hour of questions from angry shareholders who complained about Vodafone’s poor performance and the generous way it rewards management.
One described the board as “dysfunctional” and said “there is a perception that the chief executive is underperforming” Newly-appointed chairman John Bond said he supported Sarin but that his performance would be under constant review.
Vodafone’s mobile-phone customer growth accelerated to 9.5pc in the most recent quarter, helped by the addition of 11.7m subscribers through acquisitions in markets including Turkey.
Vodafone added a total of 16.2m customers in the quarter ended in June, taking the overall number to 186.8m, better than forecast. Growth was 6.6pc in the same period a year earlier, and 3.7pc in the preceding quarter.
However, increased competition and a saturated Western European market are hurting revenue growth. Sarin finalised Turkey’s Telsim Mobil Telekomunikasyon Hizmetleri acquisition for $4.55bn (£2.5bn) as part of plans to concentrate on low penetration areas.
Sarin stated: “This is a robust operating performance in testing markets with revenue for the quarter in line with expectations. Whilst many markets in Europe remain highly competitive, we are on track with our revenue and cost initiatives in this region.”
Following a cut in handset revenue forecast earlier in the year, Vodafone said it will be restructuring into three separate units, covering Europe, emerging makets and new technology.