labels: hutchison essar, vodafone, profiles, stock markets - india
Arun Sarin: Global telecom Czar news
Rex Mathew
13 February 2007

Arun SarinThough he is the top executive of the largest telecom company in the world by revenues and Europe's most profitable company, Arun Sarin has not received as much attention in the Indian media as Pepsi CEO Indra Nooyi has.

While Pepsi is a high profile brand in India, Vodafone is relatively unknown. In India, Vodafone is probably known only for its sponsorship of the England cricket team. But that is about to change as Sarin starts his big push into the Indian telecom market with Vodafone's successful acquisition of Hutchison Whampoa's stake majority stake in Hutchison-Essar, India's fourth largest telecom firm.

The 52-year old Sarin graduated from IIT Kharagpur in 1975 and did his masters from the University of California at Berkeley. He started his career in the telecom industry in 1984 when he joined Pacific Telesis group in the US. He became a director at AirTouch, which was spun off from Pacific Telesis, in July 1995, and was its president and COO when the company was acquired by Vodafone for more than $66 billion. After the acquisition, he became Vodafone's CEO for the US and Asia Pacific.

He left Vodafone in 2000 when the company merged its US operations into Verizon Wireless, only to return a few years later. During the years away from Vodafone he was the CEO of a software company and also tried his hand as a venture capitalist

Sarin succeeded Christopher Gent as Vodafone's CEO in 2003 and inherited a company, which was reeling under the costs of expensive buyouts at the peak of the technology boom. Under Gent, Vodafone had spent more than $300 billion in a series of high profile acquisitions, including the $230- billion takeover of German telecom group Mannesmann AG, the biggest ever buyout in history.

Vodafone had to write down its investments in these acquisitions substantially, which affected its bottom line for years. For the financial year ended March 2006, Vodafone had reported a net loss of over $43 billion - the biggest ever loss in European corporate history.

Arun Sarin has been far more cautious in acquisitions than his predecessor. He made an aggressive bid for AT&T Wireless in 2004, but walked away when it became too expensive. AT&T was finally sold to Cingular for $41 billion. Vodafone and Sarin have been unsuccessful in establishing a footprint in the US, though the company remians the single-largest shareholder of Verizon Wireless with a 45-per cent stake.

Last year, Sarin led Vodafone on a restructuring drive which saw the company exiting some markets like Japan and Sweden and selling-off stakes in telecom companies in Belgium and Switzerland to net a total of close to $16 billion.

Sarin also started his push into emerging markets last year through the $4.55 billion buyout of Turkish company Telsim. Though this deal is still being criticised as a very costly one by analysts, Sarin has proceeded with his plans and has now taken an even more significant step by acquiring Hutch-Essar. Vodafone has agreed to pay an even higher price for Hutch than what it paid for Telsim - more than $900 per subscriber for Hutch as compared to around $500 per subscriber for Telsim.

This country would see much more of Arun Sarin in the days to come. He has already made a significant strategic move by signing an agreement with Bharti Airtel to share telecom infrastructure. The Vodafone - Bharti alliance would deter any new player planning to enter the GSM space, like Reliance Communications.

Sarin has already stated his intention to increase Vodafone's market share from the current 16 per cent that Hutch-Essar currently owns to nearly 25 per cent of the Indian mobile telecom market by 2012. Also expect the familiar purple logo of Hutch to be gradually replaced by the red and white Vodafone logo.

When that happens, the cute pug, which was the Hutch mascot, would be sorely missed.


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Arun Sarin: Global telecom Czar