Uys leaves as Vodacom enters new era

Vodacom CEO Pieter Uys' surprise resignation yesterday has been in the pipeline for some time and comes as the company enters the next stage of its development.

Vodacom, SA's largest mobile network with 29 million subscribers, will be headed by its former Vodacom SA MD Shameel Joosub from next March, after a “managed succession process”. Joosub will re-join the company in September.

The news, announced yesterday morning, hardly affected the operator's share price, which closed 0.22% - or 21c - lower at R95.79. The stock opened at R95.85, reached an intra-day high of R96.15 and a low of R95.64 before recovering slightly.

Maya Makanjee, Vodacom's chief officer of corporate affairs, says the company had always planned the succession move. “Pieter [Uys] approached the Vodacom group board to discuss whether or not this would be the appropriate time to execute on that succession plan given the next stage of the company's development.”

Uys' focus will be on the transition and handover between now and March 2013, but he will obviously explore a number of options in the future, says Makanjee.

Makanjee explains that the next stage in the company's development is all about the smartphone revolution. “SA is on the tipping point of a rapid and significant expansion of smartphone use across all demographics in the market.”

“We've seen this happen in other more mature markets across Europe, Asia and America and we know how quickly the commercial environment is going to change,” says Makanjee.

“Smartphones change everything - consumers move from a world of voice minutes, texts and BBMs to a much more complex world of integrated price plans, apps, mobile Internet access, mobile video, content creation and sharing.” She says it is a whole new ball game, which means that commercial innovation is the key differentiator between providers.

Uys tells ITWeb that Vodacom has built a platform to execute on the next phase of its growth plan, which includes putting the “power of the Internet in everyone's hands”. He says Joosub knows the company and its partners.

Joosub will now lead the company through the next stage in its development. Makanjee says the board “felt that this was the optimal time” to execute its succession plan. Vodacom is now entering a managed succession process over the next eight months, she says.

There will be a smooth handover of responsibilities to Joosub, says Makanjee. “As Pieter [Uys] and Shameel [Joosub] have worked closely for years - and Shameel is very familiar with Vodacom - there will be a high level of continuity throughout.”

Joosub has been with Vodacom since its inception in 1994 and has been described by the company as a key architect in growing the business. He joined the company as an accounting clerk and was promoted to head up the commercial arm of Vodacom SA in 2000, after holding several positions within the telco.

From 2000 to 2005, Joosub was responsible for increasing Vodacom's South African subscriber base from 2.5 million to almost nine million. After being promoted to MD of Vodacom SA in 2005, Joosub oversaw the growth of the business to 24 million subscribers.

Joosub took over the reins at Vodafone Spain at the beginning of last April.

Richard Hurst, Ovum's emerging markets analyst, says it is time for Vodacom to head in a new direction as the market has become very competitive. He says Vodacom must decide whether to be a smart pipe, or just a connectivity provider.

Joosub will need to make some bold moves as Vodacom's margins are coming under pressure, says Hurst. He notes that the operator needs to move with the times and Joosub may bring a new look and perspective. “He's literally grown up in Vodacom.”

Hurst says Joosub has a “decent pedigree” to take Vodacom to the next level. Smartphones and mobile data offer a “big opportunity” for future growth, although the market will be driven by price, he adds.

Analytix BI's latest report, SA Country Report: Telecommunications Market, noted that the mobile market is reaching a plateau and needs to encourage significantly higher Internet and data use.

Uys, who was at the helm of the company for four of the 20 years he spent with Vodacom, leaves a legacy of taking Vodacom to the bourse, despite government opposition, turning Africa around and rebranding the company, says Hurst.

Uys says he always thought when he turned 50 that it would be time to make a change in his life. He celebrates his birthday later this month.

“I have one more decade to go, one more decade to do something nice and different. I can't at this stage say what I'm going to do; I'll make it known closer to the time.” However, he is looking at moving to Cape Town to be close to his son, who will go to university there after completing Matric next year.

Makanjee says, as is standard practice when an executive decides to move on, there are binding non-compete obligations in force for a period of time, which apply to all senior executives and are confidential in nature.

Uys says he has achieved major milestones in the company's history, including the listing and refreshing the brand. He says Vodacom is on a secure footing to go into the future, and people who bought a stake on listing would have doubled their investment.

CEOs should not stay at a company for longer than five years, says Uys, but should rather make way for the next generation. More and more customers are from the younger generation, he adds. “I'm probably the oldest guy in the company.”

Uys was appointed CEO with effect from 1 October 2008. Before that, he was COO between April 2004 and September 2008. He also served as MD of Vodacom SA from December 2001 until March 2005.

Uys joined the group in 1993 as a member of the initial engineering team and was appointed to the board in April 2004.

Arthur Goldstuck, MD of World Wide Worx, says Uys' “humble, self-effacing manner will stand as an example to ego-driven corporate animals in far smaller businesses in far smaller industries”.

“He was a true gentleman in a cut-throat industry. Keeping Vodacom in the lead in such a fiercely competitive era was his crowning achievement,” Goldstuck adds.