Vodafone AirTouch Public Limited Company (VOD)

Vodafone's scale and scope around the world provide cost advantages, as programs can be developed in one market and then rolled out to the rest at minimal additional cost.

Vodafone is already the world's largest wireless service provider by market cap, but most of its current operations are concentrated in the low-growth, mature markets of Europe and the U.S. Vodafone's management saw the need for the company to expand beyond its usual geographic regions and has been making huge strides toward establishing a Vodafone presence in emerging markets. In May of 2007, Vodafone acquired a 67% stake of Hutchison Essar, the fourth-largest wireless company in India, for around $10.7 billion. This steep price tag was worth it, though. With a wireless penetration rate in the neighborhood of 13%, India is one of the fastest-growing mobile phone markets in the world. The Hutchison deal came a little over a year after Vodafone's acquisition of Turkish wireless company Telsim Mobil Telekomunikasyon Hizmetleri AS for $4.55 billion. The company's operations in Turkey have exceeded expectations, and its Indian business could very well do the same. Already, revenue from emerging markets has grown substantially, with a 37% jump in EBITDA from emerging markets from FY2006 to FY2007. As growth slows in Europe and the U.S., emerging markets will account for a steadily larger portion of Vodafone's sales and profits; its savvy acquisitions in key markets put Vodafone in a good position to take advantage of this shift.

Vodafone generates significant amounts of free cash, which it is using to increase dividends, make acquisitions, and invest in the business.

Because the firm is not an incumbent telephone operator, it has no legacy problems like underfunded pension and healthcare benefit programs, civil-servant employees, or regulations mandating universal telephone service.