Analysts laud Vodacom over succession

Analysts have praised outgoing Vodacom Group CEO Pieter Uys and said his designated successor, Shameel Joosub, is the right man for the job. By Craig Wilson.

Stock market analysts have praised outgoing Vodacom Group CEO Pieter Uys, saying the telecommunications operator flourished during his tenure and that his designated replacement, Shameel Joosub, is a sound choice to succeed him.

The move is widely viewed as part of a carefully calibrated succession strategy and an indicator of a well-oiled corporate machine, analysts TechCentral polled on Thursday said.

David Lerche, telecoms analyst at Avior Research, says that on Uys’s watch the company was listed on the JSE and that its share price has risen by 70%. “Dividends, earnings and other key indicators are all up,” he says.

Lerche says he sees little reason to believe the move is anything other than a case of a successful executive deciding it was time for a change. He says the lengthy handover process between Uys and Joosub — seven months — points to “an extremely well-run company with long-term succession planning in place”.

Other top-rated analysts, who asked not to be named on account of their proximity to the operator and their relationships with their own clients, support this sentiment. They say Uys has done an excellent job at the helm of SA’s largest mobile operator and that Joosub is the obvious choice to take the reins.

Joosub, who joined Vodacom in 1994 but who left the operator last year to take the reins at Vodafone in Spain, has a reputation as a strong executor and a good leader. Some argue that his experience in the more mature, although more troubled Spanish subsidiary bodes well for his return to SA in that he now has experience in a market where margins are slimmer and data is the primary source of revenue growth.

One analyst suggests that Uys may be choosing to step down now in part because of how good a job he’s done. “There’s a tough road ahead for the sector as a whole,” he says. Uys has “proven his mettle” as the head of the SA business and, although Vodafone Group may try to keep him on, he will probably be disinclined to move to a troubled European operation or to another, similar role considering his almost two decades in the industry.

Consensus among SA’s analysts is that the move has been on the cards for some time and is nothing more than a carefully orchestrated plan on the part of Vodafone rather than a surprise move by Uys or the result of his being pushed by the group to move on in favour of the more aggressive Joosub.

That this has been in the works for some time is reflected in the fact that TechCentral first heard about the plan for Joosub to succeed Uys as far back as May. This publication declined to publish a story at the time based on a strong denial from Uys that he was leaving and the fact that a second source couldn’t be found at the time to corroborate the information.

Analysts suggest that Uys is well regarded inside Vodafone. So, too, is Joosub. They say “conspiracy theories” about Uys moving to rival Cell C are “baseless” and even “preposterous” given that this would effectively entail a demotion.

There is also consensus that the company’s share price is unlikely to be affected by the announcement. It closed flat on Thursday.  — (c) 2012 NewsCentral Media