CEO Sarin Hands Over a Better Vodafone

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Over the last year, the company has shipped 7 million Vodafone-branded handsets, mainly to India, making it the country's second largest supplier of phones after Nokia (NOK).

India isn't the only emerging market to post strong growth. As a whole, revenues from what Vodafone calls EMAPA (Eastern Europe, Middle East, Asia Pacific, and Africa) rose by more than 45% last year, as the number of subscribers in those regions doubled to 119 million. Vodafone's plan is to build on its EMAPA subscriber base by selling low-cost handsets, and through the introduction of new data services such as the mobile money transfer service M-Pesa that Vodafone and its partner Safaricom pioneered in Kenya.

The expectation is that his successor, Colao, will continue the strategy Sarin set out, at least in emerging markets. A longtime veteran of the company, Colao left Vodafone in 2003 after losing the top job to Sarin. He returned three years later as Sarin's heir apparent. During the last two years, he has run Vodafone's European operations, considered by analysts to be the most challenging of its units. Last year, revenues from Vodafone's European operations rose by just 2%. "[But] considering the maturity of the European market, even such modest growth is impressive," says IDC's Delaney.

The big question is what will happen to Vodafone's stakes in Verizon Wireless and France's No. 2 mobile operator, SFR, jointly owned with Vivendi (VIV.PA). "[Sarin] refused to cave in to calls to sell out or spin off the stakes in Verizon and SFR," says Emeka Obiodu, telecoms analyst at market research firm Global Insight in London. And many observers expect that at least initially, Colao will do the same. But if Colao is to make his mark on Vodafone, Obiodu says, just like Sarin did following in the big footsteps of his predecessor Christopher Gent, eventually he will have to make some bold moves of his own.

Capell is a senior writer in BusinessWeek's London bureau .