Vodafone, the UK mobile phone giant, has unexpectedly announced that Sir Christopher Gent will step down as chief executive in July 2003.

Why would you resign when things are going well - does he know something we don't? Damien Maltarp, Banc of America

Mr Gent, who joined Vodafone in 1985 and became chief executive in 1997, will be replaced by Arun Sarin, the chief executive of Accel Telecom based in San Francisco and already a non-executive director at Vodafone.

Vodafone, one of the world's largest mobile networks, said its chief executive's departure had been expected and that Mr Gent would stay on as a consultant until the end of 2003.

"This appointment is part of a carefully orchestrated succession plan," said chairman Lord MacLaurin.

City expectations

CHRIS GENT

54 years old Vodafone boss since 1997 Vodafone value rose 1,000% over past five years

Profile: Chris Gent - the man who made Vodafone

Lord MacLaurin said Mr Gent had come under no pressure to resign, and that it was "a testament to his achievements that Vodafone is now positioned as the global leader in mobile telecommunications".

However, Mr Gent has faced criticism from the City to reduce Vodafone's mounting debt and for his large salary packages.

Telecoms analyst Damien Maltarp at Banc of America also questioned the timing of his departure.

"He's head of one of the largest companies in the world, he's got some credibility and Vodafone is delivering good results, so why would you resign when things are going well?

"Does he know something we don't?"

Shopping spree

Mr Gent was behind a string of acquisitions, including the controversial takeover of German group Mannesmann in 2000.

Vodafone's Growth

1985 Vodafone makes first mobile call 1991 Vodafone links with Telecom Finland 1999 Merger with AirTouch 2000 Vodafone buys 3G licence 2000 Acquisition of Mannesmann

The spending spree transformed Vodafone into the world's biggest mobile telecoms firm, although last week the group received a setback when it failed to gain control of Cegetel, the firm that owns France's second largest mobile operator, SFR.

The company has paid for most of its acquisitions in shares rather than cash, thereby escaping some of the huge debts that have since crippled rivals such as France Telecom, Deutsche Telekom and BT Group.

Nonetheless, Vodafone shares have lost more than two-thirds of their value in the past three years and the company is now under pressure to reduce debt and deliver next generation technology.

Less aggressive

Andrew Darley, an analyst at ING Financial Markets, told BBC News Online that Vodafone needs to concentrate on growing its current businesses, rather than continuing to buy rivals.

This means continuity in strategy and we like the company as it is Andrew Darley, ING Financial Markets

"We would like to see a continuing cash flow from existing operations as opposed to a continuing acquisition strategy," said Mr Darley.

Mr Darley said there were already signs that Vodafone was becoming less aggressive in its attempt to dominate the mobile market.

"The old Vodafone would have bought the whole of Vivendi just to get at Cegetel," he said.

US successor

Mr Sarin was previously chief executive of AirTouch Communications, a US mobile phone group bought by Vodafone in 1999.

Mr Sarin has been part of Vodafone's growth

There was a mixed reaction among City analysts to his appointment to the Vodafone job.

"I wouldn't class him as the ideal replacement for Chris Gent," said Mr Maltarp.

"I think a lot of people will be asking who he is."

However, Mr Sarin has remained a non-executive director at Vodafone since the AirTouch acquisition, which cheered analysts looking for a smooth transition.

"Effectively he has been part of the global strategy, " said Mr Darley, "This means continuity in strategy and we like the company as it is."

Mr Sarin will be joining with a basic salary of �1.1m plus incentives similar to those enjoyed by Mr Gent.

Vodafone shareholders reacted angrily to Mr Gent's pay package earlier this year, after it was revealed he would receive his �1.2m salary plus �3.9m in shares and bonuses.

The shares dropped after news of Mr Gent's retirement, finishing the day down 2.4% at 110.25p.