Don't let the dismal performance of Vodafone's (NYSE:VOD) Japanese business dim your view on the mobile telecom giant's prospects. Japan is just part of the story. Vodafone is cash-rich and growing. Even better, the stock comes with an attractive price tag.

Indeed, lousy performance at the Japanese subsidiary J-Phone is taking its toll. Heavy marketing spending has failed to halt a slide in average revenue per subscriber and customer sign-ups. Slow to get handsets to market for sexy 3G services, J-Phone is falling further behind market leader NTT DoCoMo (NYSE:DCM) and fast-growing number two KDDI.

But don't let that put you off. While Vodafone must settle for the third slot in Japan, it ranks No. 1 or 2 in all the other markets in its global portfolio. Vodafone leads the pack in European 3G broadband network technology and services, with rollouts in Germany, Italy, Portugal, and Spain. The Vodafone live! multimedia service has attracted nearly 7 million users in just over a year. As Europeans go text messaging-crazy during Euro 2004 and the Athens Olympics this summer, Vodafone will get an added boost.

Fools take note: Vodafone's greatest strength is its cash-generating ability. Last year's profits and some asset sales allowed it to reduce its net debt and make a number of acquisitions. Expect about $12.5 billion of free cash flow in 2005.

Vodafone's loss to Cingular Wireless in the bidding war for AT&T Wireless (NYSE:AWE) was a blessing in disguise. Backing out of the wildly overvalued deal leaves Vodafone with plenty of resources to look for better deals elsewhere, plus room for extending share buybacks and dividend hikes.

Besides, in the United States, Vodafone owns 45% of Verizon's (NYSE:VZ) wireless business, and it could increase its cash considerably if it chooses to exercise an option expiring Aug. 9 that forces Verizon to buy up to $10 billion of its shares. Vodafone received a dividend worth about $1.4 billion for its 45% stake, so whether or not Vodafone exercises the option, Verizon is a lucrative holding.

Sporting an enterprise value of just 11 times 2005 free cash flow, Vodafone is hard to ignore. Even AT&T (NYSE:T), despite its dim prospects, trades at 12 times EV/FCF. European peers' multiples are in the high teens. Surely Vodafone shares have hit the floor.

Fool contributor Ben McClure does not own shares of any of the companies mentioned.