Vodacom CEO’s resignation a surprise

Pieter Uys’ resignation as Vodacom CEO has come as a bit of a surprise in the investment community. But, they also welcomed the appointment of Shameel Joosub as his replacement.

Several analysts said Uys, 49, is still very young and that it was surprising that he only remained in the post as CEO for five years.

Uys told Moneyweb that when was appointed as CEO he always knew that he would be in that position for three to five years, before he had to change. “Next year is my fifth year as CEO, my 20th at Vodacom, and I am 50.”

He stated that Joosub is an excellent successor: “Shameel has spent time in Spain, which is a very competitive market, which will stand him in good stead in South Africa. He has been on several roadshows and knows the company well.”

Joosub is currently the CEO of Vodacom Spain, but he is well known within Vodacom and the South African investor community. He started at Vodacom in 1994 and when he packed his bags for Spain in 2010, he was the MD of Vodacom South Africa and served on the Vodacom board.

Interestingly, Bloomberg reports that Vodafone also announced today that his peer at the Portuguese operation, Antonio Coimbra, would fill Joosub’s position at Vodafone Spain.

Coimbra is the third CEO of the Spanish network in less than two years and Bloomberg adds that the Spanish unit has been suffering declining market share and profits. The Spanish unit’s operating earnings also fell 24% last year, which earned it the title as worst performing European operation.

Uys emphasised that there will be a smooth handover period to Joosub. “I will be here for the remainder of the financial year and I will make sure the company performs well. During this time I will also hand over to Shameel,” he said.

Joosub’s appointment starts in September and Uys will remain at Vodacom until the end of March next year.

Uys also stated that he had an excellent relationship with parent company Vodafone. “Vodafone is a good shareholder and parent company. They have always supported us well.”

Joosub will have big shoes to fill as Uys was a popular CEO within Vodacom, and also engaged with customers through social media such as Twitter. His resignation also caused quite a stir and trended on the popular social network for most of the day.

Pieter Uys
Pieter Uys - Vodacom CEO

Vodacom flourished under Uys’ leadership in customer reach and financial rewards for shareholders.

The company listed in May 2009 and has according to Sharedata Online rewarded shareholders with annualised returns of 28%. Put differently, if you invested R1000 in Vodacom on the first day of the listing, and reinvested dividends, you would now have R2115.

The performance of Vodacom’s main SA competitor, MTN, over the past three years has been an annual return of 10%. This means that a R1000 investment would have grown to approximately R1328.

The number of total Vodacom subscribers has grown from 39,6 million in 2009 to 48 million today.  The number of broadband customers grew from 720 000 to 12,2 million.

An analyst, who requested to remain anonymous, said he was surprised by the announcement as Uys was well respected. He said the only negative view on Vodacom was that very little materialised from the promises of aggressive African expansion following the Vodafone deal in 2009.

He also hopes Uys will remain within the telecoms sector as there are very few people in South Africa who can step into his shoes. “He is a very young and to lose him to another industry would be a great loss. It is not easy for someone from outside the telecoms industry to manage a telecoms network and there are several case studies in SA to proof this.”

One such case was the brief tenure of Papi Molotsane at Telkom a few years ago.

Uys did not want to divulge what his future business plans are while he remains at Vodacom, but alluded to a significant lifestyle change. “My son is currently in matric and wants to study at the University of Stellenbosch next year. We are thinking of moving with him to Stellenbosch.”

He did however refute speculation that he will join his predecessor at Vodacom and new CELL C CEO Alan Knott-Craig. “No. My blood is red,” he said.

Uys’s move to Stellenbosch follows a trend among successful South Africans. He also already has a strong relationship with the University of Stellenbosch where he studied engineering and completed an MBA. Uys serves on the advisory boards of the university and its business school.

Source: Moneyweb

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Vodacom CEO’s resignation a surprise