AFTER almost a year as chief executive of Vodafone, Arun Sarin is facing a growing chorus of complaints about the mobile-phone giant’s lacklustre stock-market performance.

David Lis, a senior fund manager at Morley, spoke for many in the City last week when he described Vodafone’s recent record as “dismal”. Since Sarin replaced Sir Chris Gent last July, the company’s shares have lagged behind the broader market.

That under-performance started in January, when Vodafone began its $40 billion tilt at AT&T Wireless, the American firm that was eventually bought by Cingular. Vodafone shares have since fallen 20% to 119p.

The bid for AT&T Wireless was unpopular among many British investors, not least because it seemed to contradict Sarin’s stated intentions on his arrival last summer. He said that he planned to concentrate on building a single Vodafone from the many acquisitions made during the Gent years. Investors took this to mean that further costly expansion was off the agenda.

The AT&T Wireless episode left investors with a lingering suspicion about the company’s expansionist ambitions and its commitment to do right by shareholders. Yet this is only one of many concerns.

Vodafone is struggling in Japan, where a lack of third- generation (3G) handsets has left it vulnerable to aggressive marketing by its rival KDDI, which has quickly acquired 14m 3G customers.

In Britain, profit margins have fallen in the face of fierce competition led by 3, Britain’s first 3G network operator.

These early experiences of 3G have worried investors about the billions of pounds Vodafone is ploughing into the technology, and the potential impact on group profit margins.

Recent middle-management changes in Britain, Japan and elsewhere have led one rival to conclude that the company has “an unsettled structure, an unsettled team. It does not seem a terribly stable environment.”

Individually, none of these problems is critical for a group of Vodafone’s size: it has 135m customers across the world, generates annual profits of more than £10 billion, and remains the third-biggest company in the FTSE 100, with a market value of £79 billion.

Yet collectively, they prompt concerns that the company’s best days are behind it and that it is struggling to wring the best out of its far-flung operations. This was the message last week from a series of interviews with investors, analysts and retailers — most speaking anonymously.

Lis said: “There is a general feeling of disquiet and discomfort at the lack of progress made by Sarin. The City feels misled by his original strategy statement, which he back-tracked on by going for the American acquisition.

“Vodafone is generating prodigious amounts of cash but there are persistent concerns about the massive investment in 3G and the future growth of the business.”

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive