With hindsight, it’s strange that just a year ago shareholders in Vodafone were fretting that chief executive Arun Sarin would overpay for an Indian mobile telecoms operator, Hutch Essar. Vodafone's share price went on to gain around a third in 2007, and City analysts now talk of Vodafone Essar, as it’s now known, beating long-term expectations. As a result, investors have been convinced not only of Mr Sarin’s deal-making skills, but also of the value to Vodafone of emerging markets. So, with growing use of mobile networks to carry data and lighter regulation raising the scope for growth in Europe, Vodafone looks well placed for 2008.
At December’s India-focused day for analysts, Vodafone estimated there are over 1bn people without phones in the developing countries where it operates. India makes up the bulk of that. But Vodafone's bosses think that over 40 per cent of India's population will have mobile phones by 2012 (compared with 19 per cent today) and they want to push Vodafone Essar's share of that growing market from 18 per cent to, perhaps, 25 per cent. That's feasible because the Indian business's revenues are growing at over 50 per cent a year.