The United Kingdom's Vodafone Group (NYSE:VOD) recently lived up to its status as a truly global mobile phone operator by buying a 10% stake in India's Bharti Tele-Ventures for $1.5 billion. It seems like a move that investors can really appreciate, considering that India is a populous country displaying major economic growth -- and a place where cell phone usage is due to increase a great deal.
Last July, Philip Durell recommended Vodafone as a Motley Fool Inside Value pick. I have to admit it seemed surprising to me, since a mobile provider sounds a bit more like a high-growth pick than a value-based one. Not so in this case, though. Vodafone is a company where shareholders are the beneficiaries of considerable free cash flow generation in the form of hefty dividends. Not to mention its other appealing elements, including consumer switchovers to 3G technology as a major growth catalyst in the near future, and its forays into new areas.
Even then, though, Vodafone was underrepresented in markets like India and China -- an element that the company is obviously trying to rectify. Indeed, last month, Vodafone revealed its intent to expand in Asia, France, Poland, and several other growth markets.
India is hot property, and it's no secret that other mobile giants like Motorola (NYSE:MOT) and Nokia (NYSE:NOK) have been eyeing the area, as well. The prognostications are impressive. Market research firm In-Stat, for example, recently said that by 2009, Asian mobile provider revenues will be more than $260 billion. The same data show India is expected to be the fastest grower in the region, with a 32.8% compound annual growth rate in subscribers, and 31.1% in sales, from 2004 through 2009. Indeed, other data suggest that the Indian mobile phone market is increasing by 2.5 million users per month.
Meanwhile, Bharti, which is described as the leading national mobile operator in India, had upwards of 14 million mobile users at the end of September, described as a 21.8% share of customers in the country.
Vodafone may have been a value pick, but agreements like this one seem to make an argument that the company is setting itself up for some heady growth. Obviously, with those two ideas in tangent, investors could be well-positioned to prosper.
To read more about Vodafone and other stocks that Philip Durell has pegged as investments for the value minded, take a free 30-day trial to Motley Fool Inside Value .
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Alyce Lomax does not own shares of any of the companies mentioned.
