Vodafone, which owns South African mobile group Vodacom, made the surprise announcement as it reported earnings and predicted potentially slower growth ahead on competitive pressures in Italy and Spain, causing the stock to drop the most since February.
Colao's decade as CEO at Vodafone has been mostly characterised by sales to clean up a sprawling global network of businesses and stakes in telecoms companies that he inherited from his predecessor Arun Sarin in July 2008. Vodafone said that the company had been transformed by him from a consumer-focused 2G/3G mobile operator to one with global leadership in the "Internet of Things".
"Today Vodafone is at a natural juncture, the strategic 10 -year reshaping of the group is now nearing completion", Colao, 56, told reporters. Vodafone also announced a succession plan that will see CFO Nick Read take the reins and Deputy CFO Margherita Della Valle filling his shoes.
Read has been CFO since April 2014 and was previously CEO for the Africa, Middle East and Asia Pacific region. Read joined Vodafone in 2001 as Vodafone UK Finance Director before being appointed Vodafone UK Chief Commercial Officer then Vodafone UK Chief Executive. "I would also add that the appointment of Nick and Margherita serves as a testament to the strength and depth of the Vodafone senior leadership team that Vittorio has assembled and led over the last decade".
Gerard Kleisterlee, chairman, said Mr Read had been the "co-architect of the group's strategy together with Vittorio, combining extensive global operational and commercial leadership with world-class financial acumen".
"This was a year of significant operational and strategic achievement and strong financial performance", said Colao.
Revenue fell 2.2 per cent to £46.5 billion compared to previous year, due to the deconsolidation of Vodafone Netherlands and fluctuating currency rates.
For Read it's a "step-up" role, after a good track record at Vodafone, said James Ratzer, a telecoms analyst at New Street Research in London.
Looking ahead, Vodafone expects to grow adjusted organic Ebitda by 1% to 5%, excluding the impact of United Kingdom handset financing in both years, and the significant benefit in the prior year from regulatory settlements in the United Kingdom and a legal settlement in Germany.