Vodafone Turns Profit; CEO to Retire

Arun Sarin will be replaced by Deputy CEO Vittorio Colao.
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Updated from 9:07 a.m. EDT

Arun Sarin is retiring as CEO of

Vodafone Group

(VOD) - Get Report

at the end of July, to be replaced by Deputy CEO Vittorio Colao.

The Britain-based telecommunications company, which owns a 50% stake in Verizon Wireless with

Verizon Communications

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, said the company more than doubled its customer base in Sarin's five years at the helm to 260 million. That was accomplished through expansion into emerging markets such as Romania, the Czech Republic, Turkey and India.

"I feel that I have accomplished what I set out to achieve, particularly in developing and implementing a new strategy," Sarin said in a release.

The announcement was made in conjunction with the company returning to full-year profitability. Vodafone posted a net profit for the year of 6.76 billion pounds, reversing a loss of 5.29 billion pounds a year ago. The company also notched a 14.1% jump in annual revenue to 35.5 billion pounds.

"Arun has done a tremendous job as chief executive," said Chairman Sir John Bond. "He has led the company with distinction and navigated Vodafone through a period of rapid change."

The company also said nonexecutive directors Michael Boskin and Jürgen Schrempp will not be seeking re-election to the company's board.

Vodafone shares were dipping 78 cents, or 2.4%, to $31.77 Tuesday.

Meanwhile, European rival

Deutsche Telekom

(DT) - Get Report

responded to allegations that it monitored phone calls of business journalists, nonexecutive board members and shareholders. Over the weekend,

Der Spiegel

magazine reported on the story, saying Deutsche Telekom monitored calls in order to stop leaks.

Deutsche Telekom said the allegations don't relate to any unlawful use of the content of calls -- in other words phone-tapping. Call records contained details of the time, duration and participants of calls, the company said. At the request of the company's board of management and the supervisory board, a German law firm will perform a complete and independent investigation of the incidents.

"I am shaken to the core by these allegations. We take the situation most seriously," said CEO Rene Obermann. "We have called in the public prosecutor's office and will support them in their full investigation of these allegations."

Shares of Deutsche Telekom were down 5 cents at $16.89.

Among other telecom names,

AT&T

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was tacking on 0.2%, and Verizon was gaining 0.4%.

Sprint Nextel

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was down 0.4%.